Most businesses operate under assumed names, rather than the names of the owners of the businesses. There are several reasons for a business to use a “Fictitious Business Name,” as such assumed names are legally known. Registering a Fictitious Business Name is not an expensive procedure. If you are starting a business, the advantages of having a registered Fictitious Business Name make it a worthwhile option for you to consider.
A Fictitious Business Name (FBN) is the legal term for an assumed name which a business uses instead of the name of the owner. A FBN may also be called a DBA (short for "Doing Business As") name. The use of a registered Fictitious Business Name allows individuals or businesses to use trade names without having to go to the expense of creating a separate legal entity. The rules for filing a FBA are established by each state but follow the same general model. Check with your Secretary of State Office for the specific requirements and procedures in your state.
In most states, filing of a FBN is carried out at the county level thought the county clerk’s office (and the county records office if a formal record is required). A few states require that an FBN be filed with the Secretary of State’s Office. You are normally required to file a FBN if the name under which you will do business is something other than your own name if the business is an individual proprietorship. If the business is a partnership or is incorporated, but will be known to the public by a trade name, you’ll need a FBN. For example, a specialty restaurant chain that uses different names for individual locations will need a FBN for each name.
To file a FBN get the necessary forms from the county clerk in the county where the business is located. Do a name search and make sure the name you’ve chosen is not already in use; you cannot use a FBN that is already in use. The Secretary of State’s Offices in most states have online databases for this purpose. Once you have the forms complete, have them notarized and file them at the county clerk’s office. You may need to have the filing recorded as well with the county recorder. In most jurisdictions you must place a notice of the filing in a local newspaper.
The chief advantage to using an FBN is that you do not have the cost of setting up a separate business entity to do business under another name. You can accept checks and credit card payments using the FBN. Another benefit is that you can make good use of the FBN as a trade name for advertising, place it on letterheads and on checks. Finally, once your FBN is registered you have the exclusive right to use that particular name.
Don’t neglect to learn the specific regulations in your state regarding the use of assumed business names. Doing business under an assumed name without an FBN can leave you open to charges of fraud. Check to see when the FBN filing will expire. Usually you need to file every 5 years. Despite this, using an FBN is a relatively uncomplicated way to protect your business name. A well-chosen name can contribute to your business success. Establishing strong name recognition in your community draws in customers and promotes word-of-mouth advertising, boosting customer traffic and sales.