No, this has nothing to do a shady alias. A fictitious business name is also known as a trade name, assumed name or a “doing business as” name (DBA). If your business is a sole proprietorship or a partnership, and you operate under any name other than your full name (“Marty’s Market Research” rather than “Martina Gruszewski’s Market Research”) you will need to register your DBA. The same is true if your corporation or LLC does business under a name other than its legal name, as might be the case when Paul buys Pete’s Fine Dining and changes the signage. Why?
Think of it as a consumer protection measure, intended to let the public know who really owns and operates a business. It’s necessary, but it doesn’t always protect your fledgling enterprise in the ways you imagine. Keep four things in mind:
- Registration does not necessarily prevent other businesses from using the same name, and it does not give you trademark protection.
- Registering a name generally does not give an out-of-state entity the authority to do business in state. That may take an additional registration.
- Start the process well before opening day. It may take several weeks and will be necessary to do things like open a bank account in the name your business actually uses.
- The requirements of registration vary widely from state to state and sometimes by county within a state. Let’s briefly tour the requirements of Texas, New York and California.
Registering Your Name in Texas
In Texas sole proprietorships and general partnerships must file a certificate of assumed name with the County Clerk where the business is principally located. Other kinds of entities — limited liability companies, limited partnerships, corporations, limited liability partnerships and professional associations — must file the certificate application with both the Texas Secretary of State and the County Clerk. Although these offices may assist you by making databases of names available for search, you are ultimately responsible for making sure that your business name is unique. Another business may subsequently register the same trade name. Registrations must be renewed every ten years, and there are civil and criminal penalties for failure to file.
Registering Your Name in New York
If you do business as a sole proprietorship or partnership in New York, you must file a Certificate of Assumed Name, also called a Business Certificate, with the County Clerk of every county in which you wish to operate, not just your principal place of business. Limited liability companies, corporations, limited liability partnerships or limited partnerships file with the New York Department of State, instead. In the latter case, you can request a name search from the Department of State to ensure that your name is unique.
Registering Your Name in California
California does it by county. You must register your fictitious business name statement with the County Clerk of your principal place of business. There is no provision requiring filing with the Secretary of State’s Office and no central registry of assumed names. As in Texas, you are responsible for your own name search. Registration must take place within 40 days of the commencement of business. There is also a publication requirement. You must also publish a notice of your assumed name once a week for four successive weeks in a newspaper of general circulation in the county of your principal place of business. Within 30 days of the last publishing date, you must file an affidavit of publication with the Clerk’s office. Each county may have slightly different requirements and filing fees. In San Diego County, for instance, the fee is $42 for the first owner and first business name. In Los Angeles County the fee is $26.
The effort a start-up has to spend on the basic tasks of defining a business structure and protecting its identity may seem like a headache. It’s counter-intuitive for an entrepreneur focused on an innovative product or service. Done carefully at the beginning, though, with the help of a business attorney who understands your business model, it should eventually become something you barely notice because it works so well. To the extent you can, let the bean counters count beans for you. That frees your creative energy for the things that only you can do.