I was recently speaking on the topic mistakes business owners make and how to avoid them and one of the issues I discussed was business licenses. A question that arose was, “I’ve filed my DBA so why do I need to have a business license?”
Business Licenses and DBAs (doing business as) are two separate things altogether. Business licenses are issued from the city you are in providing services to clients. Many times you must register in multiple cities if providing services to clients in cities other than the one in which you are based. Business licenses are usually paid annually (although I have a client in a city that requires it semi-annually) and the fees can be based on gross sales, gross payroll, or number of employees. You may also need a special permit if operating out of your home. When I first began working with clients, I had a home office and I had to pay the regular city license plus a home operating permit.
A DBA is filed with the county and allows you to “Do Business As” the name you pick for your business even though the business is not an entity (it’s a sole proprietorship or partnership). You must file the name you intend to use, and publish the information publicly. When I had a DBA, I had to file every 5 years, and when I changed addresses, I had to file again. Each time I filed with the county, I had to publish in a local newspaper the information for four weeks. Check with your local requirements to make sure you are in compliance. By getting a DBA, you may open bank accounts in the business name rather than your own which appears as more professional.
So to answer the question do you need both a business license and a DBA as a sole proprietor, the answer is yes!