D/B/A’s And What Chapter 71 of the Texas Business and Commerce Code Means To You And Your Business

Most business owners are familiar with the concept of a “DBA” – the idea that a person or a business may file certificate declaring the business or person is doing business under an assumed name – and many have filed such forms with their county clerk. However, what most business owners don’t realize is that failure to file the necessary documents with the Texas Secretary of State could potentially  prevent them from enforcement of contracts made under the assumed name until a certificate is filed, render the individual or entity liable for certain costs and fees incurred in the course of legal action, and in some cases render the business owner personally liable for the actions and liabilities of the business. 

Chapter 71 of the Texas Business and Commerce Code requires entities such as corporations, partnerships, limited liability companies (an “LLC”), and others to file a certificate, referred to as an “assumed name certificate”, with the Texas Secretary of State. Cases throughout Texas have borne out that the consequences for failure to do so can range from an inability to enforce contracts, liability for certain costs of court and fees, and even personal liability in various situations. These consequences can have significant business consequences and, in those cases in which the business owner is found personally liable, undermine one of the most important purposes of the business entity – its role as a liability shield for business owners. 

Similarly, many business owners don’t realize their assumed name certificate automatically expires ten (10) years after its filing and must renewed within six (6) months prior to its date of expiration. If the assumed name certificate expires without renewal, the assumed name certificate is rendered void. It’s therefore necessary to maintain your “DBA” by filing for renewal prior to its expiration. 

Fortunately, the solution is relatively simple and inexpensive. As it stands at the time of this article, the Texas Secretary of State charges $25.00 (plus minor ancillary fees associated with the method of filing and payment) for an assumed name certificate. Proper preparation and filing of an assumed name certificate or a renewal of a previous filing can be accomplished by an experienced business or corporate attorney.