From rebranding to creating a new product line, there are plenty of reasons why business owners in New Mexico might wish to call their company by a different name (or someone who is just starting their business). Before you can start legally conducting business under a new name, though, you first need to file for a “Doing Business As” (DBA).
The good news is that obtaining a DBA in New Mexico is about as easy as it gets since New Mexico, unlike most states, does not require DBAs to be registered with the state. However, there are still a few requirements and important considerations to keep in mind that we’ll go over in this article. We’ll also cover what a DBA is and the benefits and drawbacks that come with using one so you can decide if a DBA is the right choice for your New Mexico business.
A DBA (also called an “assumed name” or a “fictitious name”) is essentially a new business name that your company is free to use in addition to its legal business name. When you form a new company in New Mexico, you’re required to choose a legal business name, and this is the name that you have to use when conducting all business activities. Unless you choose to file for a DBA, which allows you to conduct business under a new name.
With a DBA, you can conduct almost all of the same business activities that you can with your legal business name. This includes things like opening a business bank account, invoicing customers, marketing your business, and more. Just about the only thing you can’t do with a DBA is file taxes, as you must use your legal business name in this instance.
In New Mexico, a DBA can be used by all types of businesses. This includes sole proprietorships, partnerships, LLCs, and corporations.
The main benefit of a DBA is that it lets you create a new public identity for your company without actually having to form a new company, and there is a range of reasons why businesses in New Mexico might want to go by a different name. One common reason why businesses file for a DBA is if they are undergoing a rebrand. It’s also common for businesses to use a DBA if they are launching a new product line or entering a new market. For example, a company called “Tim’s Landscaping” might file for a DBA to use the name “Tim’s Tree Removal” if the company wants to start offering tree removal services in addition to its landscaping services.
DBAs are also commonly used to appeal to specific market segments. For instance, companies that have numerous locations often use a DBA for each location in order to appeal to customers in that area. Here’s an example of what this might look like: if a company called “Panacea Auto Repair” has locations in Roswell and Santa Fe, it might use the names “Panacea Auto Repair of Roswell” and “Panacea Auto Repair of Santa Fe” to distinguish the two locations and improve local marketing.
One final benefit of using a DBA is that, in some cases, you don’t have to have an EIN to file for one. Since sole proprietorships and single-member LLCs without employees are not required to have an EIN, an EIN is not required for these businesses to get a DBA either.
Using a DBA doesn’t have many downsides. This is especially true in New Mexico where obtaining a DBA is much easier than in most states. However, there are a few potential pitfalls to keep in mind.
The biggest potential con of using DBAs is that you might end up confusing your customers. If your business goes by numerous different names, growing brand awareness and encouraging customer loyalty might become more difficult. That’s why it is important to use DBAs strategically and ensure that the additional name enhances your marketing efforts rather than hindering them.
The only other real drawback of DBAs you should be aware of is the fact that they do not provide any liability protection. Remember that a DBA is just a name, not an actual company like an LLC or corporation. While it’s possible in New Mexico to conduct business as a sole proprietor using a DBA, most business owners in New Mexico choose to go ahead and form an LLC or corporation instead thanks to the liability protection (among other benefits) that these business structures provide.
In most states, it’s never a good idea to begin conducting business under a different name without first filing for a DBA. New Mexico however, is one of the few states that doesn’t regulate DBA usage. We’ll go over exactly what this means for business owners in our section on how to file for a DBA in New Mexico, but, for now, just know that it means you are free to use a DBA for your business without having to register it with the state.
Many business owners wonder if filing for a DBA will affect how their company is taxed. However, the short answer to this question is that it won’t affect it at all. Again, a DBA is just another name for your company–it does not affect its structure, and it also doesn’t affect how it is taxed. Just keep in mind that you will have to use your legal business name instead of your DBA when filing taxes.
Since New Mexico doesn’t regulate DBAs, there isn’t much of a process to file for one in the state. However, there are still a few requirements and considerations you need to be aware of:
New Mexico has a few naming requirements that business names have to meet, and these requirements apply to both legal business names and DBAs:
Perhaps the most important requirement to meet when choosing a DBA is ensuring that no other company in New Mexico is already using the name you’d like to use. To do this, you can conduct an assumed name search using the New Mexico Secretary of State’s business entity search tool. Just search the name you want to use and see if any businesses show up in the results. If the search returns no results, you can assume that the name is unique and are free to use it. If there is another business already using the name, then you’ll have to modify it or choose a different one.
New Mexico is one of the few states that does not require you to register DBAs with the state. Many business owners take this to mean that DBAs are not allowed in the state, however, this is not the case. In fact, New Mexico actually makes it easier than most states for businesses to begin using a DBA.
All you have to do is choose your DBA and confirm that it meets New Mexico’s naming requirements, and you are free to begin using the new name for all business activities without the need to register it with the state. Most local and state business forms will include a section where you can list your DBA alongside your legal business name, and New Mexico will make a note of any DBAs listed on these forms so that they appear in the state’s business entity database. Aside from this, though, New Mexico does not regulate DBA usage in any way.
Using a DBA can sometimes offer businesses a lot of benefits when it comes to branding and marketing. And, in New Mexico, using a DBA doesn’t even require you to register the name with the state or pay a filing fee. Just be sure to remember that using a DBA is not the same as forming a company, and it’s still a good idea to form an LLC or corporation with the state to provide you with liability protection.
No, there is no requirement for businesses in New Mexico to use a DBA. In fact, the majority of businesses in the state do not have or necessarily need one. But if you do want to use a different name for your New Mexico business aside from its legal name, you are free to do so without having to register your DBA with the state.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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