A topic not fully explored in our recent post about entity formation types is fictitious business names. Whether your state refers to them as DBAs, Fictitious Business Names, or Trade Name, this unique aspect of business compliance is something anyone handling entity management should understand. The rules & regulations vary significantly on a state-by-state basis, and while this isn’t a comprehensive discussion of state compliance parameters, it should serve as a jumpstart for your DBA understanding.
The name here is pretty descriptive. From a legal standpoint, fictitious business names allow businesses to operate with different names while still being a single legal entity. Organizations do this to aid new product launches, to use a shorter version of their name in advertising, to avoid confusion with another business as they enter a new territory, and many other reasons.
In the majority of U.S. states, the process of using this alternative name is more complicated than you might think. On one hand, some states don’t require you to register your name at all. Some require you to register it with the state, county, AND city. Some states require you to get state approval on your name and then use it in a print publication. Some have completely different rules based on what type of entity you operate. This is why, especially for enterprises operating in multiple states, businesses HAVE to pay attention to the compliance requires of their DBAs on a state-by-state basis.
As we mentioned above, the majority of states require some degree of filing for DBAs. However, there are 14 states who have no filing requirements whatsoever. These include: Alabama, Alaska, Arizona, Delaware, Florida, Hawaii, Kansas, Maryland, Mississippi, New Mexico, Nebraska, Ohio, Wisconsin, Wyoming.
Many states require county-level filing in place of or in addition to state-level filing. To a certain extent, this is required based on what type of entity you have, with sole proprietorships and general partnerships requiring county clerk filing most often.
Some states check for the uniqueness of the name; others simply require that the name be registered with the government for record keeping. Some (we’ll discuss these in a moment) actually provide exclusive naming rights for your fictitious business name.
The 19 states that require county-level filing in addition to or instead of state-level filing include: Arkansas, California*, Colorado, Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Nevada, New Jersey, New York, North Carolina, Tennessee, Texas, Virginia, West Virginia. (*Only for Out of State Businesses)
The final government body you may have to file your fictitious business name with is the city. There are only three states that require city-level government filing in addition to or instead of county-level & state-level filing. These are: Maine, Massachusetts, Rhode Island.
As we mentioned, one of the aspects of fictitious business name policy that varies the most from state to state is how unique the fictitious name actually has to be. Some states don’t have any policy on how similar or identical a fictitious business name is to another. Some states have loose guidelines and provide approval based on how unique they deem your proposed fictitious business name to be.
The two states below actually provide businesses with completely exclusive rights to the fictitious name they choose, meaning no other entity in that state can come close to the name they’ve chosen to operate their business under. These two states are: Alaska and North Dakota.
The last unique wrinkle we’ll discuss in regards to fictitious business name establishment is the publication requirement. Seven states require that, after an alternative business name is approved, a business must publish their fictitious business name in an approved newspaper or recognized legal publication.
The seven states are: California, Florida, Georgia, Illinois, Minnesota, Nebraska, Pennsylvania.
One important note to keep in mind as you look to maintain ongoing compliance for your managed entities is that the initial application & approval of a fictitious business name is just the first step. The majority of states that require the name to be registered at the state, county, or city-level also require annual registration renewal.
This is critical, especially if you’re using your DBA to open bank accounts in the state. Despite being approved to use the name, failing to renew it could result in operating your business illegally due to the name appearing on bank documents and other official items.
Whether you’re forming an entity and know you need a DBA, or you are entering a new territory with your existing business and need to establish your fictitious business name in this new state, Legalinc is here to help. With our easy-to-use, all-digital dashboard, you can form businesses efficiently & correctly, and apply for your DBA in just a few clicks without bearing the burden of compliance. Simply put, we’ve got you covered. If this is an immediate need, you can get started today by creating your free Legalinc account! If you have any questions along the way, feel free to reach out to our Customer Success Team at any time.