For instance, if your company intends to serve a greater purpose than simply turning a profit, it may be worthwhile to look into starting a nonprofit corporation. For these organizations, any revenue earned either goes back into covering expenses or is donated to a specific goal. Because of the role nonprofits play within the community, some business owners may opt for a Doing Business As (DBA) name to further accentuate their company's mission. To clarify the relationship between nonprofit corporations and DBA filing, we'll begin by discussing what it means to use a DBA name.
What's a DBA Name?
In case you're unfamiliar with the concept, a DBA name — also known as a fictitious business name — is a term that applies when business owners want their business to publicly operate under a different name than the one legally registered. However, whether or not a business uses a DBA name has no bearing on their legal status — it only grants them the ability to operate with a fictitious name. On its own, a DBA doesn't carry the same protections or other benefits that a company would enjoy as an LLC or other type of legal business entity.
The reasons behind adopting a DBA name vary, of course. One of the most common scenarios is when a sole proprietor wants to run their business under a name other than their own. From a marketing perspective, a DBA name implies a level of expertise and professionalism that an individual just can't communicate as well under his or her own name.
Moreover, a DBA can help establish a brand identity and develop a community around your product or service, which can live on even after you've chosen to retire or sell your business. Corporations looking to target a specific demographic or expand on a pre-existing business structure or product line may register a DBA name as a simple way to add to their portfolio.
DBAs and Nonprofits
Although you certainly don't need to use a DBA name for your nonprofit, there is absolutely nothing wrong with using one if you go about it the right way. If your organization's structure and goals legitimately align with that of a nonprofit, a DBA name could be a good way to market your mission to the public and allow your business the benefits that come along with nonprofit status.
Your DBA name is best viewed as an extension of your organization — it needs to exist in tandem with the integrity and legal requirements of your nonprofit. Remember that your nonprofit must meet the strict requirements to qualify for tax exemption under the federal government's 501(c)(3) status.
You'll run into problems if you attempt to apply a nonprofit-type DBA name to an LLC. By seemingly marketing yourself as a nonprofit but not being registered as such, you'd be falsely representing your mission and misleading the public about the structure behind it. To avoid ethical and legal ramifications, be absolutely certain that you only use a nonprofit-style DBA name when the parent company is already registered as such. Doing business as a nonprofit when the company on record is a for-profit LLC will only hurt your future and reputation.
