Three Simple Ways to Name Your Business Legally
Business name, DBA, assumed name—it’s all Greek to many people. But as a small business owner, you can’t afford to ignore the legal niceties when it comes to the names your company uses. When you do business in Minnesota, you are required to use a registered name for your business. If you use a name that is not legally associated with your company, you could lose any limited liability protections your business entity may provide.
Here are three easy options for ensuring that your company name complies with the law:
One option is to conduct business under your own name as a sole proprietorship. This type of business structure provides no liability limitations, but can be a quick and simple option for one-time business deals. Jane Smith is free to start mowing her neighbors’ lawns for profit without further ado, as long as she markets the company under her own name.
Create a New Entity
When you register your business as a limited liability company, corporation, or other entity with the Minnesota Secretary of State, you are entitled to do business under the company name you register. Keep in mind that you must use the complete and precise name, including the “LLC,” “Inc.,” or other entity tag. That means that if you have a limited liability company called Max’s Auto, LLC, you can’t start calling yourself Max’s Auto Services or Max Henderson’s Auto. You can’t even drop the LLC and go by Max’s Auto.
File a Certificate of Assumed Name
If you want your business to use a name that is not legally registered, you must file a certificate of assumed name with the state. They can be filed by individuals or by business entities that plan on using another name. A certificate of assumed name doesn’t establish any new legal protections, so it’s not like forming a legal entity. Instead, it is just a way to notify the state and the public that Max’s Auto, LLC will also conduct business under the name Max’s Auto. DBA (short for “doing business as”) is another term for assumed names.
Obtaining an assumed name is usually the easiest way to rename your business. The process requires filing a registration of the name with the Secretary of State and publishing the required notices in a legal newspaper in the county where the business is based. Note that the notice from the newspaper confirming publication must be kept in your company’s records for as long as you use the assumed name. The filing fee is $30, and as long as you stay up to date, renewing the name is completely free.
Once you register an assumed name with the state, be sure to renew it each year! State law requires businesses to renew their assumed names on a yearly basis. If you don’t renew your name, it will expire and it is illegal do to business under an expired name. You also have to pay a fee to reactivate an expired name.
When it comes to naming a business, the hardest part should be coming up with a name that helps clients understand and remember your company. Once you find the perfect name, following these simple guidelines should help you get through the legal side with ease.