An assumed name certificate allows businesses to operate under a name that’s different from their legal name, providing more flexibility for branding and marketing. Many small businesses choose to file for an assumed name to create a recognizable identity without forming a new legal entity. Understanding what an assumed name is and how it can benefit your business can help you decide if filing for one is the right step for you.
What Is An Assumed Name?
An assumed name allows a business to operate under a name different from its legally registered name. This is especially useful for sole proprietors and partnerships that want to do business under a more marketable name without forming a separate corporation or LLC.
Registering an assumed name is also a strategic tool for companies looking to branch into new markets or product lines without altering their formal business structure. This flexibility makes assumed names a popular choice among entrepreneurs looking to expand their reach and adapt to diverse business environments.
What Is An Assumed Name Certificate?
An Assumed Name Certificate formalizes the registration of a business’s DBA (Doing Business As) name. It’s a legal document that declares the public use of a name other than the business’s legally registered name. This certificate is crucial for compliance and transparency, allowing customers and regulators to identify the true ownership of a business operating under a different name.
Assumed Name vs DBA: What’s the Difference?
An assumed name and a DBA (Doing Business As) are often used interchangeably, but there’s a slight difference between the two. An assumed name refers to any name a business operates under that is different from its legal name, while a DBA is the formal registration of that name.
Registering a DBA allows businesses to operate under a different name without forming a separate legal entity. It’s commonly used by sole proprietors, partnerships, and corporations looking to rebrand or expand. Both terms serve the same purpose legally, but the terminology may vary depending on the state or local requirements.
Why Would I Need An Assumed Name?
Here are some common reasons why small businesses would complete assumed name registration.
- Conducting business under another name. A small business planning to do business under a name which is not the same as the business owner’s name must have an assumed business name certificate or DBA. Obtaining this registration allows business owners to accept money and conduct business under this name.
- Open a business bank account. Most financial institutions, including banks, require a certified copy of your assumed name before you can open a business bank account. After opening a business bank account, you may start collecting checks and payments under the company’s DBA.
- Discouraging competitors from using the name. Does another business in the same state want to use your assumed name? They cannot use it since you already have the name in use.
- Public marketing and advertising. Once a small business has its name registered, the company may begin publicly marketing and advertising.
What Else Should I Know About Assumed Names?
Obtaining an assumed name is not the same as filing for trademark registration.
Both an assumed name and a trademark are business names. However, an assumed name only grants the owner rights at the state level. A trademark is an original and unique logo, design, symbol or phrase. This mark helps customers identify the brand and differentiates the business from its competition.
Entrepreneurs who plan to protect their intellectual property at the federal level are advised to file for trademark protection.
How to Get a Certificate of Assumed Business Name
Obtaining a Certificate of Assumed Business Name is a straightforward process, but it requires careful attention to detail to ensure compliance with local regulations. The steps to secure this certificate involve interacting with local government offices, preparing for some expenses, and timing your application correctly to align with your business plans.
Reach Out to Your Local Office
The first step in obtaining an Assumed Name Certificate is to contact your local county clerk’s office or the appropriate state agency. This office handles the registration of business names and can provide the specific forms and guidance needed for your application. It’s important to gather all necessary business information and ensure that your desired business name is not already in use. The local office will also inform you about the process, paperwork, and any legal nuances specific to your locality.
Be Ready for a Filing Fee
There is typically a filing fee associated with registering an assumed business name. These fees vary depending on your location and the type of business structure you have. It’s essential to budget for this expense as part of your business’s initial costs or when planning a rebranding. Make sure to confirm the exact fee amount and acceptable payment methods with the local office to avoid any surprises.
Start as Soon as Possible
When planning to use an assumed business name, it’s advisable to start the registration process as early as possible. This allows you to secure your preferred name quickly and helps avoid delays in launching or rebranding your business operations. Early registration ensures that all legal and promotional activities can proceed without interruption, under the name that best fits your business identity.
Benefits of Filing for an Assumed Name Certificate
Filing for an assumed name certificate allows businesses to operate under a name that differs from their legal name, providing greater flexibility for branding and marketing. It helps build recognition by creating a name that resonates with customers and fits the business’s identity. Registering an assumed name also ensures compliance with local laws, protecting the business from legal issues. It can make opening business bank accounts and signing contracts easier, as many banks and vendors require proof of registration. For businesses looking to expand services or enter new markets, an assumed name offers a simple way to create a fresh identity without forming a new legal entity.
Common Mistakes When Filing for an Assumed Name
Filing for an assumed name may seem straightforward, but errors can lead to delays or compliance issues. One common mistake is failing to check name availability, which can result in rejection if the name is already in use. Businesses sometimes omit required renewals, causing their registration to lapse. Providing incomplete information on the application or failing to publish a notice in jurisdictions that require public announcements can also create legal problems. It’s important to carefully follow state-specific guidelines and review all documentation before submission to avoid costly errors.
Legal Implications of Using an Assumed Name
Using an assumed name without proper registration can result in penalties, fines, or legal disputes, especially if another business claims rights to the name. Businesses may also face difficulties enforcing contracts or pursuing legal action if the name isn’t properly registered. Failure to comply with state or local requirements can lead to loss of credibility with vendors, clients, and banks. Proper registration protects the business’s legal standing and ensures compliance, reducing the risk of litigation or operational disruptions.
Wrapping Up
Filing for an assumed name allows you to conduct business under a different name without having to refile your formation paperwork which can save you time and headaches. However, it is extremely important to register properly to avoid mistakes and legal issues. If you’re ready to file for an assumed name, our DBA formation service makes the process simple and stress-free, ensuring everything is completed correctly from start to finish.
Call us at 877-692-6772 or visit us at MyCorporation.com for more information.