You might be considering a new direction for your business and wondering if it’s possible to change your business name after incorporation. The good news is that for registered corporations or LLCs, the answer is a resounding yes.
While the idea of changing your business name might seem daunting, the process can be straightforward if you understand the necessary steps. This guide will walk you through everything you need to know to make the transition as smooth as possible.
Why Should You Change Your Business Name?
Changing a business name can be a strategic move to better align with your evolving brand identity, target a new audience, or reflect significant changes in your business model. Other reasons include rebranding to shake off a negative image, legal reasons, merging with another company, or differentiating from competitors. A new name can rejuvenate your brand, improve market positioning, and attract new customers, making it a crucial consideration for businesses aiming to adapt and thrive in dynamic markets.
7 Steps to Change Your Company Name: A Quick Guide
Changing your company name is a big decision that can reshape your brand identity. To ensure the transition is seamless and legally sound, it’s important to follow a structured process.
Below is our a simple seven step guide outlining the essential steps you need to take to successfully change your company name. Whether you’re responding to a shift in your business strategy or rebranding for market relevance, these steps will help you navigate the process efficiently and effectively.
1. Understand Why You Are Changing Your Business Name
A business name change is a serious undertaking for any business. Naming a small business is a thoughtful process. It takes time and research to complete. The name of your business is meant to be unique. It helps differentiate you from your competitors.
When you are changing a business name, you need to be certain the change benefits the either the business or its customers base in some way. Here are a few questions you may ask yourself before you start to change a business name. This ensures you, and the business, are ready for the change.
Questions To Ask:
- Did you name the business after yourself? Some entrepreneurs start a small business they name after themselves. Over time, they may find it’s a good idea to conduct a name change. This allows them to pick a more professional-sounding business name.
- The current name doesn’t reflect your mission or values. Did you start a business with a certain mission in mind? Has this purpose changed over time? A name change will help put you back on the right path. You will be able to identify your business and the goals it works to achieve.
- The business name is not sticking with customers. Customers may struggle to spell, pronounce, or remember the name of your business. The less recognition customers have of a brand, the more likely a small business will have difficulty retaining its audience.
- You’re rebranding. The business has changed since its inception. As such, you’re planning to rebrand. A name change is just the beginning of a complete brand refresh!
2. Conduct a Name Search
You have a pretty good idea of why you want to go through the process of a name change.
The next couple steps are similar to naming a small business. Brainstorm some business names. Jot down a few options. Then, conduct a name search for their availability.
You may look through a trademark database like USPTO’s Trademark Electronic Search System (TESS). Or, you may work alongside a third-party trademark filing services provider. This provider determines if this trademark has already been registered or if it is available for use.
Check in with the Secretary of State in which you do business. You’ll want to make sure this business name is available. Your business needs to follow the state’s rules for naming a small business. For example, an LLC may need to identify itself as “LLC” or “L.L.C.” in its business name.
It’s also a good idea to conduct a domain name search. Check to see if the domain name, and preferred social media handles, are available for your new business name.
3. Obtain Approval
In an LLC, the members (owners) must approve a name change. Corporations must also receive shareholder approval prior to a name change.
Approval may be obtained through a resolution for change of name of the company. Review corporate bylaws (corporation) or LLC operating agreement (LLC) for further details on name change approval.
4. Notify the Secretary of State and Contact the IRS
Once the members and shareholders agree to the name change, it is time to notify the state and contact the IRS. Let’s break down what companies incorporated as corporations and LLCs should know about these notifications.
- Notifying the Secretary of State: To change your business name with the state you do business, prepare articles of amendment. This document notifies the state the business is changing its legal business name. Pay the filing fees. Submit these documents to the state. Once the articles of amendment have been approved, the name change will be official on the state level.
- Contacting the IRS: The IRS must be notified about the business name change for federal tax purposes. Different types of action will be required depending on your entity formation. A corporation, for example, will need to mark the appropriate name change box of Form 1120 when the business files its current year return.
5. Determine If You Need a New EIN
Incorporated businesses are assigned an employer identification number (EIN) by the IRS. This is a federal tax ID. It tracks the payroll activity of a small business.
Some name changes may require new EINs. Check in with the IRS to determine if your business needs to apply for a new EIN.
6. Update Business Licenses and Permits
What happens to your existing business licenses and permits under a new business name? Reach out to your local city or county offices. They will determine if you need to apply for new licenses and permits or cancel existing ones.
7. Speak With a Legal Professional
It’s almost time to share your new business name with the world! Before you begin sharing the news with your customer base and updating business signage accordingly, it’s important to first meet with an attorney.
Inquire if there’s anything else left to do before announcing the name change. For example, you will need to amend your existing LLC operating agreement or corporate bylaws with the new business name. You may also need to get in touch with your bank and determine whether you’ll need to open a new business bank account.
Pros and Cons of Changing Business Name
Changing your business name can be a pivotal move with lasting impacts on your brand identity and market presence. Here, we explore both the advantages and challenges to help you make an informed decision on how to change a business name.
Pros:
- Rebranding for Relevance: A new name can more accurately reflect your current business operations and market position, enhancing relevance in a dynamic industry.
- Market Expansion: Changing your name might be necessary to target a broader or different demographic as your business evolves.
- Legal Requirements: A name change may be required to comply with legal issues if your current name infringes on trademarks.
- Distance from Negativity: If your brand has suffered due to controversy or negative publicity, a new name can signify a fresh start.
- Better Branding: A new name can offer a more impactful, memorable branding opportunity that aligns with your marketing strategies.
Cons:
- Customer Confusion: Existing customers might be confused by the change, potentially impacting customer loyalty and brand recognition.
- Marketing Costs: You will need to invest in updating marketing materials and campaigns to reflect your new name.
- Administrative Hassle: The process involves considerable paperwork, legal processes, and potential downtime which can divert attention from daily operations.
- SEO Implications: Changing your business name can temporarily affect your search engine rankings and online presence.
- Risk of Misalignment: If not well-thought-out, the new name might not resonate with your target audience, leading to a disconnect with your market.
Final Thoughts: Consider a Doing Business As Name (DBA)
Let’s say you are content with your legal business name. However, you would like to operate under another business name. This name, you find, more accurately represents a subset of your business. You would not need to file for a formal name change in this situation. Instead, you would consider filing for a doing business as name (DBA).
A DBA is a name which identifies a business. Essentially, it allows business owners to operate and receive payments under a different name than that of their legal business. Obtaining a DBA makes it easy for business owners to add additional lines of business as the company grows and expands.
Depending on the needs of your business, you may find you may be a good fit for a name change. Or, you may find it’s more advantageous to file for and register a DBA.
Let’s help change your business name. Visit mycorporation.com and our team of professionals will assist you with your small business needs.