The Importance of Registering Your Business
August 2nd, 2016 by Bunch & Brock
When it comes to business, there is a lot of value in branding. A memorable logo, solid advertising, and thorough customization can go a long way toward gaining a competitive edge in today’s seemingly endless sea of consumer choice. However, there may be no more important piece in the branding puzzle than a well-chosen name. Recording that name is one of several registrations involved in running a small business.
In order to create a public record letting people know who is running a business, anyone who wants to name their business anything other than their given name is legally required to register for a “Doing Business As” (DBA) name. Also known as a trade name, fictitious business name, or assumed name, a DBA is way for a sole proprietorship or partnership to use a business name without having to create a formal entity. For example, if Henry Clay wanted to run a pottery business as Henry Clay, he would not need to register the name. However, if he wanted to operate it as “Pottery by Henry,” he would. And if he had an LLC named “Pottery by Henry, LLC,” he would have to file a DBA before starting “Pottery by Henry Too.” DBA registration also protects the owner by preventing anyone else from using the name.
Registration with the state is legally required to open a business bank account. Separating personal monies from business monies is a vital business practice for many reasons, including protecting the owner from personal loss in the event the business fails and increasing the appearance of professionalism. Proof of proper registration is also required for small business loans and will be requested by most lenders if the owner applies for a business credit card. Since securing funding can often be extremely critical and time-sensitive, it is wise to register a business early in the formation process. Leaving it until the end can put an owner in a tough spot, at risk for losing out to a competitor, unable to hire workers, and possibly even in danger of shutting down.
Registered businesses have state identification numbers, allowing the routing of taxes, which is a requirement for hiring employees. Many suppliers offer wholesale rates for business owners who can show official state paperwork, making registration a prerequisite for receiving certain discounts. Implicit in registration is the assurance that a business is legitimate, which can put new customers at ease and more likely to choose a registered company than an unregistered one.
Taking the right steps as you are getting your new business off the ground is essential for any start-up. With over 35 years of experience, the Fayette County business lawyers at Bunch & Brock are committed to providing each of our clients with a high level of personal service. We are dedicated to helping those in our community who may be in the beginning stages of developing a business or may wish to review a prior formation. We take the time to fully understand your situation and discuss your options. Let us work with you to make sure that your business is operating legally and to its maximum benefit. We encourage you to contact our office by calling 859-254-5522 or filling out this online form.