Many businesses used fictitious names. Using a fictitious business name may be beneficial to the company, but can make small claim filing difficult.
What Is a Fictitious Business Name?
Any business can choose to do business under a name other than the one used when it was formed. These "other" names are called fictitious business names, assumed names, or DBAs (short for doing business as). The use of a fictitious name is controlled by state law, and the state sets the term for it used in your location. This kind of "doing business" only applies to using a name, not to being a foreign corporation or similar legal issues.
To use a fictitious business name, you will have to file with your state, usually the secretary of state's office or your county, to file an assumed name certificate. First, you should do a fictitious business name search to make sure that the name you want to use is available, and then you can file to use it. Not every state protects fictitious names like they do real names, but you don't want to use someone else's name. Using a DBA without registering it can lead to trouble for your business and its officers and owners later.
The name of a corporation or LLC is set in the documents creating the entity. Partnerships generally include all the names of their original partners; the naming of partnerships is also governed by state law. In any case, you may not want to use that original name. Sometimes, you're lucky to become very well known under another name; Federal Express was called FedEx by many people for so long that it chose to use that name.
The business can change its name in these situations, but filing an assumed name certificate is easier. It was once uncertain whether using a DBA for all purposes would work. The law is clear that any properly registered assumed name functions exactly like the real name to enforce contracts and sue and be sued.
Why Use A Fictitious Business Name?
As we said before, sometimes you use an assumed name because that's what the public has come to call you. But there are other reasons, such as:
- Using differing names for different products
- The original name may have received bad publicity, and a new name may address the problem
- The original name is hard to say, hard to spell, or simply too long
- Using different names for different areas (Best Foods versus Hellman)
- For sole proprietorships, the reason may be privacy
- For partnerships, which tells you more? DUI Attorneys, LLP or Acme, Smith, Jones & Brown, LLP
Fictitious Name Law - Step by Step
Each state has its own law, and the purpose is usually to protect the public from businesses using assumed names fraudulently. The public needs to know the parties it does business with for credit, litigation history, liens and judgments, filing suit in civil or small claims court, and serving process to file a lawsuit.
Usually, the statute will tell you how and where to file. Some states require filing with the state wherever you file business notices. Others require filing with the county where your main office is located, or your business is conducted. Some states require that you file with both, and others may also require publishing a notice of your name in a newspaper. Several states mandate periodic renewal of your certificate.
Ways to Get in Trouble
If you don't formally file your fictitious name, you may encounter serious problems down the road. Sometimes there are civil or criminal fines. Some states won't let you file a suit in a name you haven't registered. Meanwhile, your officers and owners who make and sign contracts can end up personally liable for them. You and they can be sued in civil court or small claims personally when using an unregistered DBA.
You can always get a lawyer to help you, but that could cost significant money that you don't have yet. Alternatively, think about online legal filing services that will have information for you. Also, you can search for "assumed name certificate [with your state's name]," which will connect you to usually easy-to-follow instructions. Those instructions will often link you to the forms you need to file. You can also find out how to do a fictitious business name search in your state with a similar search. If all else fails, you can call the Secretary of State's Office or the County Clerk in your county and get information. There will probably be some fees, but those usually won't be more than $100.
If you're trying to file in small claims court against a business, you can run your fictitious name search, usually with your state's Secretary of State's Office. Once you locate that name, you should also have the actual name of the business and the names of its officers, directors, and owners. Now you know who to sue. Most states also have very detailed guides online for filing in small claims court. If you still need help, do an online search for "small claims court" in your county. It will give you a contact number for the Clerk of the Court, who, while usually extremely busy, will eventually answer your questions. Bear in mind that most court personnel try to be helpful to people acting pro se, that is, without a lawyer.
Several good reasons support getting a fictitious business name and following the proper procedures. It protects you, gives your owners privacy, and helps you avoid penalties for not following the rules. You can find another company's name online to know who they are. The process is relatively easy as legal filings go, and it's not hard to find help. Once you complete the process, you can use your new name, confident that you won't get in trouble.