How To File A DBA In Illinois

Key Highlights

• Discover how DBA enables companies to operate under a name other than their legal identity.
• Learn how to use DBA for a variety of goals, like branding, market expansion, and rebranding after a merger or acquisition.
• Learn the costs and procedures involved in registering a DBA name for an Illinois company.
• Discover how a DBA can assist with branding and marketing, even if it doesn't lead to the creation of a new law firm.
• Understand the limitations Illinois places on DBA names and why it's important to make sure the name is both pronounceable and legal.

What is DBA?

Companies that desire to conduct business under a name other than their official one frequently use the term "DBA" or doing business as. Having a hidden identity for your company is similar to that! This saves businesses the burden of having to go through the official legal procedure to change a name and instead enables them to come up with more creative and memorable names for their brands or products.

This strategy is frequently employed by small businesses or solopreneurs who want to build a brand or product around a specific name but don't want to lose that name to legal concerns or disagreements with other businesses that could share the same name. 

In addition, depending on the state where the business is operating, businesses must register their DBA name with the appropriate government agency, generally the county clerk's office or secretary of state. Fines, penalties or even legal action might be imposed for failure to comply. So, if you're considering using a DBA, be sure to research and think of a name that is original and permitted. 

Why do you need a DBA?

For several reasons, you would require a DBA or "doing business as" registration if you're beginning a firm. 

Operating under a different name

If you desire to run your business under a name other than your legal name, that is one of the most popular justifications. Consider the following scenario: John Smith is the legal owner of the business he wishes to run under "Smith's Auto Repair." In this scenario, registering a DBA would be necessary so that your consumers could recognize your company by name.

Opening a business bank account

There are further reasons you would use a DBA in addition to utilizing a different name. As an illustration, many banks want a DBA registration before letting you create a business bank account. The bank must verify that you are running a genuine business before they permit you to deposit money into an account.

Building brand recognition

Building brand awareness is a further justification for registering a DBA. Your chances of gaining clients and developing a devoted following can be improved by picking a catchy name for your company and continuously advertising it.

How to set up a DBA in Illinois

Illinois has a relatively simple procedure for establishing a DBA. You should do the following actions:

Step 1: Opt for a Name

The first step is to choose a name for your Doing Business As (DBA) that is distinctive and has yet to be monopolized by another company in Illinois. A tool for checking name availability is available on the Illinois Secretary of State's website.

Step 2: Verify Name Constraints

Before continuing, it is crucial to study the name restrictions. For example, assuming the firm is incorporated, the name cannot contain the terms "corporation" or "incorporated" or refer to a governmental entity.

Step 3: Lodge the DBA

You may register your DBA with the Illinois Secretary of State after choosing a name and ensuring it's appropriate. The "Application for Registration of a Business Name" form must be submitted with the necessary filing fee. Printed filings cost $170, while online submissions are $150. There are additional ways for filing by mail or online.

Step 4: Release a Notice

Following submitting your DBA, you must publish a notice of registration in a neighborhood newspaper in the county where the business is located. The Secretary of State of Illinois shall verify that the publication has been made public.

Illinois DBA name restrictions

In Illinois, there are several limitations on the names that DBAs may use. Some of the most essential ones are listed below:

-The company's name cannot give the impression that it is a government entity or connected to one. This implies that unless you have authorization from the appropriate government agency, you cannot use phrases like "Federal," "State," or "United States" in the name of your firm.

• The name cannot include some words or expressions deemed offensive or deceptive. You cannot, for instance, choose a name that contains obscenity, alludes to criminal conduct, or misrepresents your company's affiliation with a well-known company or brand.
• Conducting a comprehensive search beforehand is crucial to ensure the name you choose for your DBA satisfies all the criteria. If you're looking for already-used business names in Illinois, you may utilize the Secretary of State's online database. You need a more thorough internet search to ensure that another business is not already using the name in another state or nation.
• As soon as you've settled on a name for your DBA, it's a good idea to see whether the domain name is still available for your website. To improve brand awareness, ensure your name is the same on all your online and offline venues.

Forms needed to file a DBA in Illinois

You must take numerous essential procedures to establish a DBA in Illinois. Get hold of the "Application for Registration of a Business Name" form and fill it out to start getting a DBA in Illinois. Online or in person, the Illinois Secretary of State's office is where you may get this application form. It is a complete form that asks for personal and professional information, including your name and contact details and details about your firm, such as its name and address. Additionally, you must give a concise but brief explanation of your company's goal. 

When filling out the application, you must ensure that your company name complies with Illinois' DBA rules. Following Illinois law, your business name cannot be an exact duplicate of or confusingly similar to the name of an existing corporation, LLC, or other legal body. Aside from that, you should refrain from using terms like "corporation" or "incorporated" unless your business is incorporated. Your company name cannot contain any words or phrases that are deceptive or derogatory, nor may it imply that your business is formally associated with any particular institution.

Once your company name has been confirmed to meet all Illinois DBA requirements, you can apply to Illinois's Secretary of state's office. There is more to it than that, so don't submit hastily. A filing fee must also be paid; it is $150 for online submissions and $170 for paper submissions. Your DBA will be legally registered once the Secretary of State has obtained money, completed the registration form, and evaluated your submission.

Illinois DBA filing & registration

Any business that conducts business under a name other than its legal name must first register a DBA or "Doing Business As" statement. All companies in Illinois that want to use an identity different from their legal name must register a DBA to do so. Your DBA will be registered with the Illinois Secretary of State when you complete the "Application for Registration of a Business Name" form and submit it with the required filing fee. You'll get an official document of registration, which you ought to keep on board for your records.

To ensure that your company is functioning lawfully and in line with all Illinois legislation, you must take further steps in addition to creating a DBA. After registering your DBA, you must put a notice of the registration in a newspaper in your business's region. The notice must be published within 15 days of registration, and you must show the Illinois Secretary of State proof of publication.

To let the public know that your company is running under a name other than its legal name, a notice of registration must be published. This criterion aims to shield customers from uncertainty and ensure they can precisely identify the companies they are doing business with. Furthermore, it guarantees that your company follows all Illinois laws, including the Business Corporation Act, which mandates that all companies register their DBAs.

The title under which the company is registered, the business's address, and the names and addresses of the individuals who are the owners of the business must all be included in the notice of registration. The notification must also include the registration date and a statement that the company is doing business under a name other than its official one. The notice must be printed in a publication with widespread distribution in the organization's county. The newspaper must be accessible to the public and published at least once every week.

Illinois DBA tax considerations

There are a few tax factors to remember while running a business in Illinois under a DBA to ensure you comply with all tax regulations. To remember, have the following in mind:

If you don't already have one, you must get a new Employer Identification Number (EIN) for your DBA. An EIN is a distinct nine-digit number that is your company's tax identification number. If you're beginning a new business or running your existing one under a name other than your legal name, you should file for a new EIN.

If you sell products or services in Illinois, you should apply for a permit to collect sales taxes with the Illinois Department of Revenue. Sales tax is a tax levied on the purchase of goods and services. If you must collect sales tax, you must apply for permission and submit regular sales tax returns.

Additionally, you must submit a separate Schedule C (Form 1040) for each DBA you use. A Schedule C is a tax form that sole owners use to disclose their business's earnings and outlays. Each DBA will require a separate Schedule C to record the revenue and costs.

How much does a DBA filing cost in Illinois?

The filing fee should be considered while registering a DBA in Illinois. Paper filings cost $170, compared to $150 for internet filings. It's essential to remember, though, that printing a notice of registration in a newspaper can incur additional charges. This notice must be displayed in the county where the company is situated and is mandated by the state of Illinois. Depending on the newspaper and the amount of time of the notice, there are a variety of publication fees. Budgeting for the registration of a DBA in Illinois should consider these potential extra fees.

Conclusion

To sum up, a DBA may be a valuable tool for business owners who want to use a different name for their company without creating a new legal corporation. Choosing a unique name that complies with state laws is crucial to register a DBA in Illinois. You must also seek advice from a tax expert to ensure you adhere to tax laws. 

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Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.

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