Today, through this article, I will help you understand the concept of “Fictional Firm Name” and “Fictional Name Certificate” or “doing business as.”
What is a fictitious business name?
A fictitious business name, trade name, or “doing business as” (DBA) name is any name under which a company operates its business that differs from its legal, registered name. For example, the name of the company and legal entity is Johnson Inc. In contrast, the fictitious business name can be Johnson Home Health Care, Johnson Home Health, Johnson Personal Care, etc.
In the US, a fictitious business name statement must usually be renewed every five years and filed with the Registrar-Recorder or County Clerk’s Office.
An entity is delineated as “any individual or any partnership, corporation, joint-stock company, association, business trust, syndicate, joint venture or other amalgamation or group of individuals, irrespective of whether it is formed or organized under the laws of Commonwealth or any other jurisdiction.” An appropriate business name or association (local or foreign) is outlined in its registration and organizational documentation filed in the state’s concerned department.
Any name different from your legal proper business entity name, and you are allowed formally by the county or state’s concerned department or state to use while conducting business. A fictitious business name is also called DBA (Doing Business As). Additionally, a fictitious business name can be defined as.
“A legal document showing the operating name of a company, as opposed to the company’s legal name. In the case of a corporation, a fictitious business name is any name other than the corporate name stated in its articles of incorporation”.
Is that understandable? No…
Let me try to explain Fictitious Name with the help of an example! If you have decided to start your own business as a single business owner (a sole proprietorship) or a partnership, you need to have a name for your business.
Now, you will have the choice of selecting a proper name or DBA (doing business as) for your businesses. This is called a fictitious business name. That name must not be registered before and should be available. Suppose you wish to run your business under a name different from your own (for instance, Ms. Mary doing business as “Crunchy Saloon”). The state or county may require her to register her fictitious business name. In addition, some states and counties require fictitious business names or DBA (doing Business As) filings to be prepared (for consumers’ protection).
The main reason behind filing a Fictitious Business Name is that states must do so because they are supposed to inform and update the public (consumers) about who owns a business or company. A fictitious business name filing places a business’s name and owner’s identity on the public record.
“Fictitious Firm Name,” also known as DBA (Doing Business As)
, is commonly misunderstood. Still, it can be a respected and esteemed mode to launch a business unit and have more or fewer protections for your rights as a single business owner. However, it would help if you were alert that you know the restrictions and boundaries of doing business with a “Fictitious Firm Name,” also known as DBA, to safeguard your cogent intellectual property or other trademark rights.
To get registered your business with a “Fictitious Firm Name,” you are required to file, and filing offers the sole proprietorship owners (single owner of the company) the complete independence to use a business name that helps in promoting their goods or services, also make a discrete certified business entity. Yet, be warned that doing business with a fictitious name may not protect your name from being used by other companies. Therefore, to be completely safe in this regard, you must pursue the protection of our business trademark through the pertinent authorities.
Consequently, the name under which a business functions, as opposed to its lawfully obligatory name, is deliberated as Fictitious Firm Name or DBA (doing business as).
You can call a business a fictitious firm when it changes from its legal or registered name, which is done for consumers’ protection. Such fictitious names will not include words like “Inc.” or “incorporation” as long as the business is a “corporation” registered with the secretary of the state.
You must be attentive before starting a business with a fictitious firm name because the procedures, rules, and regulations may vary from one county or state to another.
How to get a Fictitious Business Name; Requirements
To launch a business under a Fictitious Business Name, you still file the FBN forms and pay a prescribed filing fee; after that, you will receive an FBN certificate. Then, according to the state, you may need file with the county clerk’s office, a state agency, or both. Therefore, don’t forget to validate all the related local central authorities for FBN filings in the states where you are presently or will be doing business. Then, ratify all the FBN filing necessities for your business.
What is a fictitious name registration?
To register a fictitious name, you need:
- To register your business with a Fictitious Name, you must visit the county’s office to apply, along with a prescribed registration fee for the county officer or clerk (if any).
- You may need to submit a fictitious name ad for an assured time once a week for four consecutive weeks in an arbitrated newspaper county.
- This ad must be initiated within 30 days after a fictitious business name application has been filed, according to Business & Professions Code 17917(a)
- You may be charged a price ranging (from $ 10 to $100) while filing a case of a fictitious firm name and must have a business bank account. Your bank may ask for a fabricated name certificate, and the bank may help you get it.
- In many states, a business firm may not be required to file a fictitious business name if it runs under a name other than its own. The incorporation filing process may follow a similar business as fictitious name filing for a sole proprietorship and a partnership business type.
- Your residential location addresses need to be listed, and the application may be filed through any of the following ways;
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- You must present (in persona a complete Fictitious Business Name (FBN) statement, display valid credentials, and complete an Affidavit of Identity form.
Or
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- You may submit through (mail) a fully completed Fictitious Business Name (FBN) application with a notarized Affidavit of Identity form.
Or
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- Anyone other than you but on your behalf can apply for Fictitious Business Name (FBN). You must show valid identification and submit the completed, notarized Affidavit of Identity and Agent form.
Now, let me answer the questions that might arise while starting a business, such as Fictitious Business Name and its registration process.
- Legal Identity – You don’t need to consider FBN as a different legal entity because there is no difference between your and business assets. Registering an FBN may not cause your liability as an owner of the business.
- Consumers’ Protection—The state provides complete protection to the consumers; FBN is meant for people to know about the actual business owner to safeguard consumers’ safety from fraudulent business owners who must not be discharged from legal concerns when operating their business under a different name.
- Business Account—When a business is a distinct legal entity, personal and business funds must be managed unconnectedly. Subsequently, you need a separate bank account for the company with an FBN (Fictitious Business Name). In contrast, a sole proprietorship or partnership without FBN doesn’t legally need to have a separate business account.
- Advantages of FBN (Fictitious Name) – When you launch a business as FBN, you undoubtedly like to keep your expenses low and grow gradually, and filing for Fictitious Name registration will help you achieve your business goals.
- Business Recordkeeping—In the case of FBN (Fictitious Business Name), there is no need for daily recordkeeping of transactions and auxiliary protocols that are compulsory in an LLC or corporation type of business or for expenditures related to forming an LLC (Limited Liability Company) or corporation.
- FBN or LLC (Limited Liability Company) is better – The primary difference is accountability protection, but LLC (limited liability Company) offers little liability protection. The business owners’ assets remain separate or detached from the business. Therefore, no additional tax-related advantages and benefits can be claimed in the case of FBN (Fictitious Business Name).
- Doing business without an FBN –—According to California law, you don’t need to register an FBN (Fictitious Business Name) in some states, such as California. Any of your business names will not be considered a (Fictitious Business Name) since they include our last name.
- State taxes—You must submit your business returns to the state or county’s tax office since the IRS is not the only state entity that requires firms to file tax returns annually. Filing for an FBN allows you to launch a business under another name without creating a new firm.
- USE an FBN (Fictitious Business Name). You may file to have an FBN (Fictitious Business Name) if you are willing to make business transactions under the company’s domain name, but your company name does not exist as a domain name.
- Unemployment Insurance – Any business, either FBN (Fictitious Business Name) or LLC (limited liability company), will not affect your unemployment insurance claims.
- Personal bank account and Business Checks –—ECKs received from business customers may be deposited into your bank account. Still, I suggest a separate business account because some banks ask for different business bank accounts. If not, you may not be permitted to credit your business checks into your bank account.
- ONE FBN name and two businesses – some states may not permit you to use one sBN (Fictitious Business Name) for two businesses. However, some businesses may get registered as solo FFBNs
- Unique Business Name—The FBN (Fictional Business Name) must differ from the names already used in the state. If already used, remarkably similar names must not be used when two businesses are rivals in a similar marketplace.
- Sole Proprietorship and FBN –—u must have your business’s legal name operative. If you are not keen on using BN (Fictitious Business Name), you must get permission from local authorities in advance.
- FBN Ownership –—u may transfer ownership of FBN to another party for any reason, including the sale of your business.
- FBN (Fictitious Business Number) –—business lawyers and consultants recommend having EIan N (Employer Identification Number. )You must launch an SS-4 application to get this identification number from an internal revenue department.
- Obtain a copy of FBN – You may visit the county’s state department via mail, email, or fax to obtain a certificate or a copy of FBN, and an online approach will be a stress-free option.
- States and FBN –—Sometates l, such as Ohio, Alaska, Arizona, Alabama, Delaware, Florida, Kansas, Hawaii, Maryland, Mississippi, New Mexico, Nebraska, Wyoming, and Wisconsin may require FBN (Fictitious Business Name).
- Time –—typically, once you start your business under FBN (Fictitious Business Name), the filing needs to be completed within a postulated time of roughly 1-2 months; the filing process usually takes one to four weeks, depending on the authority, with some exceptions.
For Example – A guide
Starting a Business with FBN (Fictitious Business Name) in California – Step-by-step
- Check the availability of the name of what you intend to use.
- File a statement (application) of FBN (Fictitious Business Name) in the county’s clerk’s office.
- A.dvertise your new business name once a week for four consecutive weeks
- Pay the prescribed fee.
- Follow-up your case
Conclusion
Your business name is a valued asset, and you may need to protect it. Using an FBN (Fictitious Business Name) can be a significant element of your business plan and strategy. If this is the case, preparing an appropriate filing to get your FBN (Fictitious Business Name) and being assured that the registration does not expire will be crucial for your business.
Now that you know the basic facts, procedures, and processes about FBN (Fictitious Business Names) and its filings, please work with your business lawyer and compliance partner to ensure they’re done right. Don’t underrate the significance of acquiring your fictitious business name certificate. It would help if you apapprehendhat a fictitious business name is and how it can help your business. Your business name will be the underpinning upon which you are required to build your business brand. Hence, it’s somewhat to be controlled with vigilant consideration.
After leaving Wells Fargo Bank in 2014, Daniel began a career as a finance consultant, advising companies and individuals on economic policy, labor relations, and financial management.
At Nimblefreelancer.com, Daniel writes about personal finance topics, value estimation, budgeting strategies, retirement planning, and portfolio diversification.
Read more on Daniel Smith's biography page.
Contact Daniel: daniel@nimblefreelancer.com