Starting a Business in Texas: Assumed Names

Starting a business in Texas is an exciting process for any entrepreneur, and a DBA is usually a great way to start for businesses that don't have a lot of overhead costs tied up in warehousing or leasing. But first, it's important that you understand how Texas assumed names differ from the types of DBAs available in different states. If you want to know about how to start an llc in Texas please read this article.

State-specific DBAs -- the simplest type of business, where one person is doing business as another name -- can sometimes be elusive, because it seems like every state has its own terminology when referring to this type of structure. In any given state, a DBA might be referred to as one (or even, confusingly, sometimes a few) of the following:

• DBA
• Business Certificate
• Assumed Name
• Assumed Business Name
• ABN
• Fictitious Business Name
• FBN
• Trade Name
• Fictitious Firm Name

Further confusing the matter, there is no one standard location for filing this type of business; in some states, the Secretary of State handles all such filings, while in others, it may be the state, the county, or the city -- or even a combination of the above -- depending on various factors.In Texas, these business structures are known as "assumed names," and the level of government with which your particular assumed name is to register depends on the business's ownership structure.There are two main types of assumed names, each with distinct filing differences:

• Unincorporated DBA. This is a type of business owned by either one individual, called a sole proprietorship DBA, or multiple individuals (typically 2 or 3), called a partnership. These types of assumed names, for DBA owners not on file with the Corporations Division, are to be filed in the County Clerk's office of the county in which the business is to operate. (This type of filing does not secure the name statewide.)

*Note that a partnership DBA is a different structure entirely than a limited partnership, a structure somewhat like a limited liability company and registered with the Corporations Division of the Secretary of State.

• Corporate DBA. This is when a corporation already on file with the state (a legal "person") wishes to do business as another name. Texas has the unique requirement that assumed names for incorporated entities be registered both with the County Clerk and with the Corporations Division.

It is important to note that in either of these cases, a Texas assumed name -- unlike a corporation or LLC -- does not provide any legal protection to its owner or owners; the DBA is simply an extension of the person or business that owns it, and personal assets may be seized by the courts in order to pay off debts or other obligations of the business even in cases where fraud or illegal activity was not a factor.Finally, as with all other major business decisions, even the best general information can be no substitute for the customized advice of a lawyer or accountant familiar with your unique situation. Make all business decisions with the input of these professionals.