Need to Register a Fictitious Business Name?
Probably. The process is simple, the benefits tangible, so make sure you're covered.
The owner of any business operated under a fictitious business name must register that name, with few exceptions.
What's a fictitious business name in the first place? The rules are generally the same in all states. Where the owner is a person, a fictitious business name is one that doesn't include the owner's last name or one that suggests additional owners. Examples of the former are Joe's Café or Fresh Fish Market. Examples of the latter are Smith & Co., Jones & Sons, or Brown and Associates.
Where the owner is a corporation or an LLC, a fictitious business name is any name other than the name stated in the articles of incorporation or articles of organization filed with the state. If the company is a partnership, it's any name that doesn't include all its partners' last names or that suggests the existence of additional partners; these kinds of names must be registered as fictitious. No owner may use a fictitious business name that includes Corporation, Corp., Incorporated, or Inc. unless the owner is a lawfully organized corporation. Similarly, no owner may adopt a fictitious business name that includes Limited Liability Company, LLC, or LC unless the owner is a legally organized limited liability company. However, use of the unabbreviated words Limited or Company in a name is not prohibited as long as there's no suggestion that the business is an LLC.
Registration of a fictitious business name starts when the owner files a fictitious business name statement in the county where the principal place of business is located, usually within a specified time period after first conducting business under the fictitious name. If the business is conducted in more than one county, it's a good idea for the owner to register the fictitious business name in each county.
In most states, the law requires that the fictitious business name statement be published in a newspaper of general circulation in the county within a specified time period after the statement is filed. The registration is completed when a certificate of the publication is filed in the registration office.
So why do you need a fictitious business statement? First of all, most financial institutions won't open an account in a fictitious business's name or accept for deposit checks in such name without a copy of the statement. Plus, you won't be able to sue on behalf of your business unless you have a current statement on file, even though your customers can still sue you.
Besides self-preservation, the filing of a fictitious business name gives a business owner the exclusive right to use that name (or confusingly similar names) in the county of registration, as long as the owner is the first to file in that county and is actually engaged in business using the name. (The knowing filing of a false fictitious name statement is a criminal act and is usually punished as a misdemeanor.) To prevent possible infringement, potential business owners should find out if the names they want to use are available by checking state and county business name databases.
Jeffrey Steinberger is a veteran trial attorney and the founder and senior partner of The Law Offices of Jeffrey W. Steinberger , a Professional Corporation in Beverly Hills, California. He is also a renowned celebrity attorney, TV legal commentator and analyst, federally appointed SEC arbitrator and professor of law.