Ficticious Business Names: 3 Reasons to Register
Registering your business entity with a fictitious name may sound like you're going to open your own magical candy factory or even a furniture company that produces suspiciously deep wardrobes. But it can be vital to your small business' success. But whether you’re a sole proprietorship or a limited liability company, you’ll likely want a unique name to draw customers to your business. For a small filing fee, you can gain legal protection as well as enhanced branding for your business.
A fictitious business name, also known as a trade name or “doing business as” (DBA) name, is required in many states if your business does not take the legal name of its owner. What are the benefits of registering a DBA name?
Here are three reasons for business owners to step into the non-fantasy realm of registering their business with a fictitious name.
1. To Reflect Your Business
When you began your small business, you may have registered your company as a limited partnership or LLC, in which case the company name on your articles of incorporation is the one the state legally recognizes.
But you don't want to be doing business as "Small Business Concern Group LLC" when your customers and future investors should know you as "Super Happy Great Times Emporium."
By registering your business with a fictitious name, your LLC or partnership can do business with a name that will grow your brand.
2. To Be Versatile
Sole proprietors of multiple small businesses may not want to put "Humperdink Q. Pofferpock" on all of their companies' invoices. By using a trade name instead, Mr. Pofferpock may operate multiple franchises under multiple DBAs.
In some states, like California, you may be able to get away with doing business under a different name so long as you include your last name. But you probably want the option of not having to name your business "Pofferpock's Small Business."
3. To Enforce Contracts
Part of the beauty of an assumed name is that Mr. Pofferpock can legally enforce contracts done under his business entity name, instead of having to sue under his own name.
Customers can also more easily find and serve the owners of businesses when they have complaints or potential lawsuits.
Just remember that if you want to do business under a fictitious name, you need to check if that name is available first. Registered business names are public records at the state level, so you can often search a list of existing businesses in your area through your local secretary of state’s office. If the name you want is available, you can begin the name registration process with the county clerk’s office.
Keep in mind that some jurisdictions require businesses to announce their new name registration with an ad in the local newspaper or some other publication.
If you’re not sure where to start with choosing a company name, selecting business structures, or need help obtaining a business license, a small business attorney in your area can help.
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Meeting with a lawyer can help you understand your options and how to protect your rights best. Visit our attorney directory to find a lawyer near you who can help.
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Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.