Understanding Business Names: The Basics of Assumed Names

When starting a business, one of the very big decisions that owners need to make is what to name their company. Some entrepreneurs use their own personal name, like a sole proprietorship or a general partnership. However, most business entities need an official business name that is very different than the owners' personal names. This separate business name is referred to as a business assumed name, a fictitious name, a trade name, or DBA name.

What Is the Purpose of the Business Assumed Name?

A business assumed name serves several key purposes:

- Identity - It gives the business its own brand and identity separate from the owner. This allows the business to build a recognition in the marketplace.

- Legal Shield - It provides a legal shield between the the owner's personal assets and liabilities and those of the business entity. Banks and vendors do business with the entity rather than the individual.

- Flexibility - If the company changes hands, the new owners can continue operating under the established assumed name rather than changing the name. This makes ownership transitions easier.

What Entities Need an Assumed Name?

While sole proprietors can use a DBA, it's generally optional. However, most other business structures are required by law to register an official assumed business name:

- General Partnerships

- Limited Partnerships (LP)

- Limited Liability Partnerships (LLP)

- Limited Liability Companies (LLC)

- Corporations (Corp. or Inc.)

- Nonprofit organizations

Registering helps to validate that a business is organized and authorized to operate under the declared name.

How to Register Your Assumed Business Name.

The specifics of registering a business assumed name vary by the state. However, the process typically involves:

1. Choosing an available business name

- Check state registry databases to ensure that it hasn't already be taken

2. Completing the state assumed name application in your home.

- Disclose ownership information

- Pay filing fees

3. Publishing the assumed name

- Run legal notice ads for a specified time frame.

4. Filing any required certificates with the state/county

5. Renewing the registration periodically (usually every 5 years)

This legal process helps to register the trade name to your business entity. It also notifies the public that your company will be doing business as (DBA) the declared assumed name. This prevents identify confusion and gives your business name legal legitimacy.

Key Takeaways

Assumed names allow businesses to establish a brand identity distinct from the owners. Formally registering your trade name makes it the legal name your company can operate under within a particular state. While it is optional for sole proprietors, it's required for most other entities. Take the proper legal steps to register an assumed business name to give your company its own recognized presence.

I aimed to provide an overview of the key questions related to assumed business names and the registration process. Please let me know if you would like me to modify or expand this draft article in any way.