DBAs in Colorado are a versatile way to express your creativity and talents without having to change the core name of your business. For example, maybe you want to file with the IRS under a legal entity name, like Joe Smith’s Car Wash LLC, but you want to be known to your customers as Joe’s Speedy Clean. You can register Joe’s Speedy Clean as a DBA in Colorado to ensure there’s no legal confusion.
Filing for a DBA may not be difficult or expensive, but making a mistake can lead to hiccups that you probably don’t have time for. If you’re ready to file a DBA, we’ll look at what it is, whether it’s worth it, and how to file for it.
What is a DBA?
You may be wondering, what is a DBA? A DBA essentially gives you the right to choose a business name that doesn’t match your legal business name. Also called an assumed or fictitious name, it allows you to operate your business activities, including opening a business bank account, signing contracts and invoicing customers, with the name you choose.
Some business owners will use their legal name and their business name interchangeably. For example, a lawyer might use the DBA as The Accident Lawyers on a billboard, but all emails are signed with the legal practice name.
While no one technically needs a DBA (it’s not required by the state of Colorado to do business), many business owners find it helpful to communicate with their customers and keep their records straight. One of the top reasons business owners file a DBA is because they’re expanding their services into new markets.
For example, if Joe’s Speedy Clean wanted to expand into after-market parts for cars, then they might file a DBA as Joe’s Revive and Drive. This way, they can keep the car wash separate from the after-market shop.
In some cases, DBAs are filed to appease different market segments. So, if you owned several car washing businesses in different areas in Colorado, and you scaled services up or back depending on the demographic you serve (e.g., Joe’s Affordable Clean in Boulder if you’re marketing to college students and Joe’s Upscale Car Wash if you cater to the upper crust in Aspen). Filing a DBA not only gives you more options when it comes to who you serve, it can also help you create a more local presence in every city you operate.
DBAs are one of the most versatile registrations in the country, available to every type of business, including corporations, LLCs, sole proprietorships, and partnerships, so it’s worth exploring if you think you could use one.
Benefits of a DBA
The biggest benefit to a DBA is that you get to create a different public face and brand identity without the red tape of opening multiple businesses. You won’t need multiple business licenses no matter how large you grow. However, it can also be used as a legal convenience. For example, you can register your business name even if you don’t technically have a business entity.
A DBA is not only simpler to file than, say, LLC registration, but it also gives you the option to open a business bank account to keep your personal and professional finances separate — while still allowing you to file everything under your personal taxes.
Disadvantages of a DBA
The biggest disadvantage of a DBA is that it may confuse people, particularly if your business offers disparate services, like catering and car washes. If you keep expanding under the same entity name, your customers may become frustrated or even distrustful if they don’t understand the real business behind the brand. Even if you’re running a sole proprietorship, it may be easy to forget which name you’re using, leading to inadvertent delays or mix-ups.
Also, keep in mind that a DBA is just a registration for the name, as opposed to a legal status that offers you any kind of protection. An LLC is designed to limit your liability, whereas a DBA is just a formal statement that you’re using a specific name for legal purposes of your business.
Consequences for operating with a DBA without registration
There are no formal penalties or fees if you don’t file a DBA, at least not if you’re using the DBA for a lawful business. However, if you fail to register, your business name won’t be recognized for formal legal matters. So, if your invoices say one name and your registered Articles of Incorporation say another, you may not be able to take action (e.g., sue a customer for non-payment, etc.).
In Colorado, you’re required to file a DBA within 30–60 days of using the business name, though to avoid messy legal arguments, you’re better off getting approved long before you ever start using the name on your documents.
Tax considerations
Filing a DBA does not change the way you file your taxes. If you have employees, you’ll still need an EIN. If you don’t have employees (because you’re operating as a sole proprietor or as an LLC without employees), you won’t need one.
The rules for each business type (e.g., LLC, corporation, etc.) are unchanged regardless of how many DBAs you have. As noted above, though, you can file your business under personal taxes if you’re not registered as an official business entity. For example, if you run a cottage industry of low-priced cookies for friends and family, you can file a DBA and avoid paying business taxes.
Filing for a DBA in Colorado
Filing for a DBA in Colorado is fairly simple, but it’s more than just answering a couple of routine questions. Here, we’ll look at the steps that you need to take before you can successfully register.
Step 1: Start with a name search on the Secretary of State’s website
Colorado protects DBA names, so it’s important that yours is unique, and not in use by another company. Make sure that your DBA doesn’t include any business entity designators unless you’ve already filed for them. (So, if you don’t have an LLC, you can’t call your company Joe’s Speedy Clean LLC.) Conduct a Colorado business entity search. Once you’ve confirmed via the Secretary of State’s website that your DBA name is available, you can start the process of filing.
Step 2: Input your information
In addition to the DBA name, you’ll need a full description of your business as well as the effective date of the requested trade name. The easiest way to input your information is online, but you can also download and print the Statement of Trade Name form.
Step 3: Complete the registration
Once you have all of your information in, you can either submit online or mail your form to the Secretary of State. While the online process may flag errors, it also might not. That’s why it’s so important to ensure that your information is correct!
The fee to submit your new registration is $20, which you can pay by credit card, debit card, check, or money order. If you’re officially a corporation or an LLC in good standing, you won’t need to renew your name, but if you’re a sole proprietor or general partnership, you’ll need to renew once per year.
You can start the renewal process anytime within three months of the DBA’s expiration date. It can be easy to forget to renew every year, so make sure you set a calendar alert! If you’re an LLC or corporation that is either delinquent or dissolved, your DBA is still effective for one year after the delinquency or dissolution.
Filing online vs. by mail
You can either file online or download and print the Statement of Trade Name form. Whether you file online or by mail, the costs are still $20. Send the form to the Secretary of State at 1700 Broadway #550, Denver, CO 80290, along with your check or money order.
Conclusion
A DBA can be a great way to give yourself more options when it comes to your branding. Luckily, Colorado makes it relatively simple to complete and submit the required information, and unlike many other states, most businesses will only have to file once.
If you’re just getting started, it’s smart to first learn how to start an LLC in Colorado. Forming an LLC gives your business legal protection and credibility, while a DBA helps you operate under different names as your brand grows.
Before you file, make sure you understand the legal limitations of a DBA, including where it will and won’t protect you from liability. Knowing this can help you decide if it’s worth the cost and how many DBAs you might want to register as you expand your business.
FAQ
Filing a DBA in Colorado costs $20, whether you file online or by mail. Renewals for sole proprietors and partnerships also cost $20 per year.
Online filings are typically processed immediately, while mailed applications may take up to 10 business days for approval.
For sole proprietors and general partnerships, DBAs must be renewed annually. For LLCs and corporations in good standing, the DBA remains active without yearly renewal.
Yes. Businesses can register multiple DBAs under one legal entity. Each trade name requires a separate filing and $20 fee.
No. You can only include entity designators like “LLC” or “Inc.” in your DBA if your business is legally registered as that entity type.