A fictitious business name, also known as a “doing business as” (DBA) name, trade name, or assumed name, is a business name that is different from the personal name of the business owner or the legally registered name of the corporation or partnership. In business law, this term refers to a name that a company uses in its operations that is not the legal name of the entity.
This could be especially useful in cases where a business owner operates multiple businesses. Each of these businesses can have a unique DBA that reflects its particular products or services, while all of them are legally linked to the same owner or entity.
For example, let’s say a company named “ABC Holdings Inc.” owns a chain of restaurants, a bookstore, and a software development company. Instead of operating all businesses under the “ABC Holdings Inc.” name, the company might choose to use the DBAs “TasteBuds Restaurants,” “Epic Reads Bookstore,” and “Innovate Software,” respectively. These names are more descriptive and appealing to customers, and they make it easier for each business to establish its own brand identity.
Another common use of a DBA is in franchising arrangements. A local franchisee of a national fast-food chain might be a company named “XYZ Enterprises,” but it does business under the national chain’s brand name.
Can I Have an Example of How a Fictitious Name Works?
Let’s say John Smith owns a sole proprietorship. Instead of operating under his own name, he wants to run his business under the name “Smith’s Superb Sandwiches.” “Smith’s Superb Sandwiches” is a fictitious name because it’s not John Smith’s personal name or a legally registered corporate name.
Typically, states require that you have to file and register a fictitious name. Generally, this is done through the county or state agency and involves a fee. The process helps to prevent confusion and fraud in the business world because it makes public the connection between a business’s DBA name and the entity or person behind it.
While the specific processes might vary somewhat from one state or county to another, the following are the general steps involved in the process:
Step 1: Choosing a Fictitious Business Name
The first step is to decide on a fictitious name for your business. This name should be unique, easy to remember, and reflect the nature of your business.
Step 2: Conduct a Name Search
Once you have a few potential names, you should conduct a name search to ensure that another business doesn’t already take the name you want to use in your area or state. Most states have an online database where you can do this search. Additionally, you should check the U.S. Patent and Trademark Office’s (USPTO) database to ensure that the name isn’t trademarked.
Step 3: Name Registration
If the name isn’t already taken, the next step is to register it with the appropriate state or county agency. Usually, this is the Secretary of State’s office, but in some cases, it may be the county clerk’s office or another state agency. The registration typically involves completing a form where you provide information about your business and the fictitious name you wish to use.
Step 4: Payment of Fees
Usually, registering a fictitious business name requires payment of a fee. The amount can vary by state and county but typically ranges from $10 to $100.
Step 5: Publication of the Fictitious Name
In many states, once the fictitious name is registered, you are required to publish a notice in a local newspaper. This is a public announcement to inform the community that you’re doing business under a new name. The newspaper then provides an affidavit of publication, which you may need to file with the registering agency.
Step 6: File Proof of Publication
If your state requires publication, you must then file proof of the publication with the state or county agency where you registered the name. This step is usually required within a certain timeframe after the notice is published.
Step 7: Use the Name Consistently
Once you’ve registered the fictitious name, it’s crucial to use it consistently in all your business dealings to maintain clarity and avoid potential legal issues. This includes using the name on your business signs, stationery, advertising, and any online presence.
Step 8: Renewing Your Fictitious Name
Finally, remember that the registration of your fictitious business name does not last forever. Most states require you to renew the registration every few years, so be sure to understand the timeline and procedure for renewal to keep your registration active.
Legal Issues to Consider When Using a Fictitious Name
Here are some legal issues and violations regarding business practices to consider when using a fictitious name:
Infringement on Existing Trademarks or Copyrights
Infringement occurs when a business uses a name that is identical or similar to a name already protected by a trademark or copyright. This can lead to confusion among customers and may result in legal action by the owner of the protected name. For instance, if you opened a coffee shop and wanted to call it “Starbucks Brews,” you’d likely face legal challenges from the multinational chain Starbucks, as they have a registered trademark on their name.
Reflection on the Nature of Your Business
Your fictitious name should represent your business well and the products or services you offer. For instance, if you run a dog grooming business and choose the DBA “Mike’s Auto Repairs,” it would be misleading as it suggests you’re in the car repair industry. Misleading names could result in customer confusion, loss of trust, and potentially legal complications for deceptive business practices.
Consistent Use of the Fictitious Business Name
Once your fictitious name is registered, it should be used consistently across all business operations. For instance, if “Eco Green Landscaping” is your DBA, then this name should appear on all advertising materials, contracts, invoices, websites, business cards, and any other forms of business communication. Inconsistent use of the name may confuse customers and can undermine your branding efforts.
Lack of Legal Separation or Personal Liability Protection
Registering a DBA does not create a separate legal entity. Instead, it’s an alias for the existing business entity.
For example, if “Jane Doe” registers the DBA “Doe’s Delicious Donuts” for her sole proprietorship, Jane Doe is still personally liable for all business debts and obligations. This means that if “Doe’s Delicious Donuts” incurs a debt it can’t pay or gets sued, Jane’s personal assets—like her home, car, or personal bank accounts—could be at risk.
In contrast, if Jane had formed a limited liability company (LLC) for her business, the LLC would be a separate legal entity, providing her with some personal liability protection.
Do I Need a Lawyer for Help With Fictitious Name Issues?
Given the legal implications of selecting and registering a fictitious business name, it’s advisable to consult with a knowledgeable business attorney. They can guide you through the process, help with a name search to ensure you’re not infringing on any trademarks, and advise you on the potential legal implications of your chosen name.
LegalMatch is an excellent service that can help connect you with the right attorney for your needs. We can match you with an experienced business attorney in your area who can provide the guidance and expertise you need when dealing with fictitious name issues.
