DBA, or "Doing Business As," is a fictitious name for a company. Registering a DBA with the state allows businesses to open bank accounts and simplify tax filings, among other benefits. In certain circumstances, businesses might want to register multiple DBAs. This is generally permissible under state rules.
Rules Governing DBAs
You need a DBA if you're a sole proprietor or you run a limited liability corporation that wants to do business under a name different than your real name or officially registered corporate name. If your corporation is called "Jane Smith, Inc." and you want to open a coffee shop called "Jane's Coffee Shop," for instance, you'll need a DBA.
Rules and naming requirements vary from state to state, but you can typically have as many DBAs as you want.
Using Multiple DBAs
Using multiple DBAs can be advantageous for businesses for two reasons. First, if you operate multiple businesses you might be able to minimize tax liability by organizing them under a single corporation with multiple DBAs. If you own a coffee shop and a website selling textbooks, for example, you might be making a profit on the textbook site and taking a loss on the coffee shop. If the businesses are separate, you'd have to pay tax on the full profits from the textbook site. If both companies are part of a single corporation, however, you could reduce your total tax bill by showing a smaller net profit.
Second, using multiple DBAs can help you build a brand identity without confusing customers. In the example above, your customers might find it confusing to buy textbooks from a company called "Jane's Coffee Shop." Using DBAs lets you use different brands when dealing with different customer bases.
Disadvantages of Multiple DBAs
There are some downsides to using multiple DBAs. First, filing a fictitious name with the state usually comes with a fee ranging from $10 to $100. While $100 probably won't break the bank, it's often an unnecessary expense if there's no clear advantage to having a second name.
Additionally, using multiple DBAs could hurt your brand as much as help it. If you own a coffee shop and you sell coffee beans online, it would probably make more sense to use the same business name for each enterprise. Loyal customers of your shop might want to order online, and using the same name would make the online division easier to find.