How to File a DBA in Alabama

Registering a DBA is a straightforward process, but you need to complete all the necessary steps. Is it a must? Not in all cases, but it can help save you a few headaches down the road. Here’s what you need to know:

What is a DBA (“Doing Business As”)?

A DBA is also known as a “fictitious name,” “trade name,” or “assumed name.” Quite a few companies file for DBAs when they expand or open new product lines. They also use DBAs to rebrand or appeal to specific customers. For instance, you may have a company named “The Greenery” as your main company, and use “Birmingham Lawn Pros” for stronger local appeal with customers in the area.

A DBA can be used for sole proprietorships, LLCs, partnerships, and corporations.

Benefits of a DBA

One of the main benefits of having a DBA is that you have a new public identity without changing your company’s structure. You can register a DBA even if you don’t have a business entity. Another benefit is that it helps protect your business name in the state for stronger legal standing. The third? You won’t need an EIN as a sole proprietor and single member LLC with no employees.

Disadvantages of a DBA

A DBA doesn’t give you personal liability protection. Additionally, you can’t reserve a name for future use. You must actively use the name and show proof. One of the most disadvantages is that having too many DBAs could confuse customers.

Consequences of operating with a DBA without registration

In Alabama, things are a little different from other states. You aren’t legally required to register a trade name. Their common law gives you ownership rights to a trade name just by using it. There is no automatic penalty.

Now, just because it isn’t mandatory doesn’t mean you shouldn’t. The Alabama Secretary of State “highly encourages” businesses to register their trade names. You’ll have weaker legal protection if someone else tries to use the name, can’t enforce contracts signed under an unregistered business name, and you need proof to open a business account under your trade name.

Alabama doesn’t impose direct penalties for operating under an unregistered trade name, but you should rethink that strategy, especially if you have multiple business that could be affected. It’s best to avoid the challenges before they become an issue.

Tax considerations

One thing that confuses people when having DBAs is taxes. Since it is not a business structure, it has no impact on how your business is taxes. If you are a sole proprietor, you’ll report any business income on Schedule C of your personal tax return. If you’re an LLC, you will file according to your tax classification.

Filing for a DBA in Alabama

If you think a DBA is right for your business in Alabama, you’ll need to register your trade name with the state. Here are some important things to know before you begin, then we’ll cover the actual steps in registering your Alabama DBA.

Name requirements

Alabama has specific rules for trade names. Your DBA can’t include banking-related words like “bank” or “trust” without a letter from the Alabama Banking Commissioner’s Office. You also can’t use insurance-related words without approval from the Alabama Insurance Commissioner’s Office.

Additionally, you can’t use words that may confuse people into thinking your business is associated, or connected to a government agency. Stay away from words like “FBI,” “Treasury,” or “State Department.” If you’re a professional in certain fields like engineering or law, you’ll have to provide a copy of your professional license or get permission from a governing agency. The key is to avoid any words that may suggest your business is involved in anything illegal. Always keep things professional and legitimate.

Begin with Alabama Assumed Name Search

Trade names should be unique. That’s why you must confirm the name is available before you begin using it. The Alabama Secretary of State Business Entity Records website has a search tool where you can look for the name you choose and see if anything similar shows up.

Keep in mind that every business using a trade name may not appear in the database because registration is optional. It’s important to be thorough in your search, checking federal trademarks through the U.S. Patent and Trademark Office database as well, and conducting a general internet search to make sure your name isn’t already in use. The last thing you want to do is start using a name that’s federally trademarked.

If you’re planning to use the name on a website, you should also check to see if the domain is available. It could cost time and money if you started marketing the name and don’t have access to the online components.

Steps to register your Alabama DBA

Alabama is different from most states because you must use your trade name before you can register it. That means you should have the name on your business cards, social media accounts, websites, and anywhere you’re promoting your business. It’s important to keep track of when you first used the name because you need it when you file.

Alabama also requires three “specimens” to prove you’re using the trade name. These are samples showing the name in use. This could include business cards, flyers, a website, social media account screenshots, brochures, or menus. They must be clear, legible, and unaltered.

Next, you must prepare your information. Before you fill out the registration form, you need:

• The trade name
• Your legal business name (or personal name if a sole proprietor)
• Business address and contact information
• The date you first used the name in any state
• The date you used the name in Alabama
• A description of the business and how you’ll use the name
• Three specimens
• A copy of the federal trademark registration if you have one

Step 1: File online

Visit the Alabama Secretary of State’s Trademark Application page and complete the online filing. Your DBA cost includes an online filing fee of $31.20 (this includes a $1.20 processing cost) and is usually processed within 4-6 weeks.

Step 2: File by mail or in person

Download and complete the Application to Register or Renew Trademark, Service Mark, or Trade Name in Alabama form. The filing fee is $30 if you mail it or file in person.

Mail completed applications to:

State of Alabama
Office of the Secretary of State
Trademarks Division
P.O. Box 5616
Montgomery, AL 36103-5616

Or file in person at:
State of Alabama
Office of the Secretary of State
Trademarks Division
11 South Union St., Suite 224
Montgomery, AL 36130

Pay filing fee

When submitting your application, you’ll pay a filing fee of $30 (or $31.20 online). You can pay by check, money order, or credit card. If you pay by credit card for a mailed application, you must complete a credit card authorization form. Once your application is approved, your trade name registration is valid for five years before you must renew.

Filing online vs filing by mail

Alabama gives you choices: file online or by mail. Each one has its advantages. If you file online, it’s a little more expensive, but you’ll have the convenience of submitting everything electronically. The processing time is the same both ways, which is about 4 to 6 weeks.

If filing by mail, you’ll have a paper trail and may feel more comfortable reviewing everything before sending it in. It’s important to remember to include all three specimens and make sure your payment information is complete.

Whichever method you choose, keep copies of everything for your records. You may need to show proof of registration when opening bank accounts or dealing with vendors.

Conclusion

Filing for a DBA is a practical way to create a new public identity for your business without forming a new company. Alabama makes it easy with reasonable filing fees and clear requirements. The registration lasts for five years, and then you’ll have to renew it using a similar process. When renewing, you only need one specimen instead of three.

Remember, a DBA is just a name, it doesn’t provide liability protection. Most business owners combine a DBA with their business structure to get branding flexibility and legal protection. If you’re just getting started, learning how to start an LLC in Alabama is a great first step toward establishing that structure before adding your DBA.