Vermont DBA

What is a Vermont DBA (Assumed Name)?

DBA stands for “doing business as.” A Vermont DBA (assumed name) is akin to a nickname that your business can use instead of its legal business name. All types of Vermont businesses can use a DBA in place of their legal business name. Sole proprietors, who otherwise have to use their own first and last name as their business name, can use a DBA to make their business sound more professional. An LLC or corporation might use a DBA in order to rebrand or expand their offerings without having to create and pay for a separate formal business entity.

Vermont’s Business Services Division says that sole proprietors are not required to register an assumed business name with the state if they are doing business under a business name that includes their full legal name. For instance, if Pat Smith is a sole proprietor that makes and sells jewelry, Pat won’t have to register an assumed name if her business name includes her fill name (example: Pat Smith Jewelry or Pat Smith Craft Jewelry). However, if Pat want a business name that does not include her full name, she’ll need to register an assumed name or register a formal business entity like an Vermont LLC or Vermont corporation with the state.

What can I do with a DBA?

You can use your DBA for almost all business-related activities, such as to advertise on social media, build a website, open a business bank account, write checks, take payments, and even list your DBA in local directories. However, a DBA is just a name, so when it comes to paying state and federal taxes or filing for local and state business licenses, you’ll need to do so using your legal business name, not your DBA.

Can I sign business contracts with my DBA?

When legally binding contracts are being established, the legal identity of the entity or person agreeing to the contract is important. Since a DBA is just a name and not a legal entity, you’ll need to use the legal name of your business in order to enter into any contract. However, you can also list your DBA alongside the actual legal business name. For example, a sole proprietor with a DBA would sign a contract “Nancy Smith, DBA All Day House Cleaning.”

What is my business’s legal name?

The legal name of your Vermont business is the name that you put on important state and federal documents like tax forms. The legal name of a sole proprietorship is the first and last name of the business owner. When two or more people start a business together—but don’t file to create a formal business entity with the state—they’re in a general partnership. The legal name of a general partnership is the combined last names of the owners. For formal state-registered entities like LLCs and corporations, the legal business name is the name that is written on state formation documents like articles of organization or articles of incorporation.

Why Register a Vermont DBA (Assumed Name)?

Registering a DBA let’s you use an alternate name for your business and is easier and cheaper than creating a formal business entity.

Here are a few other reasons why registering a DBA in Vermont is helpful:

Use different name for your business.

A business owned by one person that isn’t registered with the state is called a sole proprietorship. If you share ownership with one or more people, you’re in a general partnership. Either way, in the eyes of the law, you are your business. This means that the name of the business for sole proprietors must include their full name (example: Jorge Lopez). The legal business name of a general partnership needs to include the last names of the business partners (example: Lopez and Smith). If you want to give your business a name that doesn’t include the name(s) of the owner(s), you need to register a DBA.

Expand your brand.

A DBA is an affordable way for business owners to add new services, expand their product lines, or even take the business in a new direction. Imagine you have a plumbing business fixing leaks and installing water heaters. You notice that some customers really want bathrooms and kitchens renovated. Registering a DBA, “Kitchens and Bathrooms Galore,” will allow you to market your new concept, open a separate dedicated business bank account, pay vendors, and take payments from customers. Now you can operate two businesses with two distinct names.

Don’t get fined.

If your business is going to use a name that isn’t its legal business name, Vermont law (11 V.S.A. § 1626) requires you to register a DBA. If you don’t, the state can fine you $50 per day (up to $10,000).

You use your domain name as your business name.

If your legal business name is “Tina’s Jewelry Box, LLC,” and you buy a domain name for your business, “tinasjewels.com,” and then use that domain name as your business name on marketing materials, social media accounts, and even customer communication, you’ll need to register a DBA for your domain.

How to Renew a Vermont Assumed Name

You’ll need to renew your Vermont assumed name every five years. You can complete the renewal process online with Vermont’s Corporation’s Division. You can also request an Assumed Business Name Renewal form and mail it or hand deliver it to the Secretary of State office. Renewals cost $40.

Can I change or update my DBA name in Vermont?

You certainly can. Amendments to your assumed business name can be filed online or you can request a paper copy. Amendments cost $20.

Can I cancel my DBA in Vermont?

To cancel your assumed name in Vermont you’ll need to fill out a Cessation of Assumed Business Name form online or request a paper copy to mail or hand deliver to the Corporations Division. Canceling your assumed name costs $20.

Filing a DBA vs. Starting a Business in Vermont

Filing a DBA and starting a business are two separate acts. Starting a business may involve getting a DBA, but it isn’t required. A DBA is a tool businesses can use to market themselves under a different name. You’ll need a business before you can register for a DBA.

There are two ways to start a business in Vermont:

Sell a product or service: Being in business is as easy as getting paid to cut hair or walk dogs. Sole proprietors (one owner) and general partnerships (two or more owners) are two of the most popular business types because they are easy to start and require no formation paperwork or filing fees.

Register your business with the state: To form a business entity like an LLC or corporation, you’ll need to file formation documents with the state and pay a filing fee.

Vermont DBA vs. Vermont LLC

A DBA won’t protect you like a Vermont LLC. A DBA is just a name your business can use to operate. An LLC is an actual legal business entity that gives business owners liability protection in the event of a lawsuit or bankruptcy. That’s because registering an LLC creates distinct legal separation between the business and the owners (members) of the business. It’s this separation that protects the personal assets (401k, car, house, savings) of owners of the LLC. LLCs can use DBAs to do business under another name, but a DBA does not offer any protection when it comes to operating a business.

If you’re a sole proprietor or in a general partnership, you might just want an affordable way to register a name for your business. In that case, a DBA is exactly what you’re looking for. But if you want an entity that will protect your hard earned assets, a Vermont LLC is probably the way to go. Northwest can help you get one.