Most sole proprietorships do business under the legal name of the owner. As a freelance worker, a person could just do business as “Debbie Johnson,” or whatever the person’s name is. This is called DBA, or doing business as. There are some sole proprietorships, however, that do better with specific branding. For example, if you own your own daycare, it would be more informative to use the name “Debbie’s Daycare” than just using “Debbie Johnson.” “Debbie’s Daycare” is considered a DBA because it does not include the proprietor’s legal name. Before you decide to make a fictitious business name for your own company, you need to figure out if you need one, and whether you need to register it if you do.
Do You Need a Fictitious Business Name?
It is important to note that the definition of a fictitious business name may vary from state to state. In San Diego County, California, for example, it is any name that does not include the surname of the individual owner and each of the partners, or the nature of the business is not clear. This means that if the previous example used “Debbie Johnson Daycare,” she may not have to register her business name as a fictitious business name because her entire legal name is included.
You also need to register your business name if the title you use implies more people are a part of the business than are actually involved. Say the name of the daycare was “Debbie Johnson & Associate’s Daycare,” but Debbie was the only one involved. This business would need to be registered as a fictitious business name even though Debbie’s full legal name is used.
A fictitious business name is sometimes required. If you transact business for profit, you have to register your business name within 40 days of your first transaction. This may vary from state to state and even from county to county. However, if you are doing business under a name that is not your legal name, you likely need to register it as a fictitious business name.
Basically, you need a fictitious business name if your legal name is not a part of the business title. Most freelance workers do not require a DBA, but anyone who provides a service or product may want to include another descriptor than just their legal name. This will help you attract more customers and clients than simply using your legal name. Always talk with an attorney to make sure you are doing everything correctly.
Why Do You Need to Register It?
Why is it so important that your fictitious business name is registered? Simply put, the government wants to be able to quickly find out who owns and operates a business in case a legal problem arises. If your business is called “Debbie’s Daycare,” the government would have a hard time finding Debbie should a consumer make a complaint.
Legal issues are not the only concern here. When you register your business name, you become part of a database that other business owners can look through to make sure the same business names are not used over and over again. Registering a fictitious business name also ensure you can sign contracts and make agreements on behalf of your business.
Turning to Legal Help
There are a lot of nuances to owning your own business. As an entrepreneur you likely expect to be a Jack-of-all-trades. When it comes to legal issues, however, you definitely want to turn to a professional. You need to make sure you do everything according to the letter of the law. When naming your business, make sure to get professional legal advice. The attorney will be able to help you register your business name if it has to be registered. A business and commercial law attorney will know exactly what is required in your location.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.