To answer that question, it is important to understand what a
fictitious name and how it is used. Here is a simple definition of a
fictitious name: A fictitious business name is one that does not use the
business owner’s name. Corporations are generally exempt, as are
businesses that use the individual proprietor's own name. If you are
"doing business as" (d/b/a), John Doe or Widgets Incorporated, then you
don’t need a fictitious name. However, American Widget Partnership run
by John Doe will need to comply with fictitious business name rules.
Complying with these rules includes filing a "fictitious business
name statement.” This filing is required by law in order to connect the
name of a business to the business owner. This protects consumers
because it allows them to get information about the owner of a company
if they have consumer problems or need to file a lawsuit. Depending on
your state law, most businesses that operate under a fictitious name are
required to complete a fictitious business name statement, publish the
statement in a newspaper of general circulation, and then record this
information with the County Recorder where the business is located.
It is a required filing to open a business checking bank account in
the name of the business. Banks will generally not open a business
account without your filed copy of your DBA registration certificate.
Note that some banks may also ask you for your business license.
For the business owner, it allows the person to set up a single
entity to operate multiple businesses without creating a new entity for
each or undergoing the expense of forming a corporation. For example,
you can sell your widgets in a brick and mortar location and have a
sales website using the same fictitious name.