A fictitious business name otherwise known as “assumed name” or DBA short for “doing business as” is a name used other than the legal or registered name of the company as long as it is not used for fraudulent purposes.
Using a fictitious name allows one to legally do business at a minimal cost and without having to establish an entirely new business entity. Through it, one can transact business, accept payments or advertise.
In sole proprietorship, an assumed name allows the proprietor to use a business name rather than the personal name. It permits the use of a typical business name without creating a formal legal entity thus making it the least expensive way of doing business. It also allows single legal entities to operate multiple businesses without creating a new legal entity for each business. By doing this, business costs and expenses are minimized while still letting you to expand.
My only concern now is how to determine if the entity under an assume name is created not by fraudulent means. Because it may happen that someone could just establish a fictitious business to defraud people or as a conduit of another company to evade legal claims against said company.
Of course, this will be difficult to determine because of the presumption of good faith in the establishment or incorporation of a business. In other words, a business entity’s wicked intentions can only be determined when fraud is actually committed or someone reports on its fraudulent intentions.
My only advice is to observe extra precautions in your every business dealings. Don’t invest your money or part from it without knowing everything. Remember, you can never be deceived without your permission.
