What this is: There are various reasons why a company in the US might consider using a business alias or assumed name, including to more accurately reflect the goods and services they offer.
What this means: While there are certainly many good reasons to use an alias, it is also crucial that companies comply with assumed name laws, as not doing so could result in civil or criminal penalties.
The term “alias” has interesting connotations, often evoking international espionage or nefarious activities. When people use aliases, we tend to think they are trying to conceal their identity.
For companies, there are several very legitimate reasons to use a business alias or assumed name, also known as a fictitious name or DBA (“Doing Business As”) name. Most of the time, it’s not done to hide who they are but to use a name that is more reflective of the goods or services they are offering.
Depending on the scale of your business, that may be easier explained than done. Let’s say, for example, a corporation or limited liability company (LLC) owns 3 different restaurants, each with its own name. For the entity to operate those restaurants with different names, it would need to register each restaurant as an assumed name of the entity. However, the process and requirements for registering a DBA vary by state and sometimes county, including registration procedures, renewal needs and potential legal consequences for non-compliance. Proper registration is crucial for legal and operational purposes.
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How to Register an Alias Name
To register a business alias, the first step is identifying if registration is needed at the state, county or city level. Requirements vary by location, so it's important to check state laws and regulations or contact an assumed name specialist for help.
State-Level Registration
In most cases, when a company wishes to do business under a name other than its legal name, it should register this name with the appropriate state filing office. For approximately 35 states, this state-level filing is the only requirement.
In most cases, a company files a certificate registering the business alias or assumed name with the state’s corporate registry (usually the Secretary of State). The registration filing is generally straightforward, asking for basic information on the assumed name to be used and the company holding the name. In most states, the name will need to be available, that is, not already used by a registered entity in the state.
County-Level Registration
Many states have eliminated their county requirements for business alias registration in recent years. For those that still require local filing, requirements vary greatly.
For example, Arkansas requires you to file with the Secretary of State and then record a certified copy with the local county clerk where the company will be doing business. New York has a similar requirement, but the filer does not have to handle the county recording. They simply pay an additional fee for each county where the company is doing business under the assumed name, and the Secretary of State handles the notification process.
In Arizona, the company may either file a tradename at the state level or file locally. Local filing is not required if the state filing is made. In Nevada, the local filing is required and a state trademark is optional to protect the name.
Other states, including Delaware, California, North Carolina and Georgia, require only a county-level filing. In Massachusetts and Connecticut, filings are done only at the town level.
With local registration, a key question becomes, where does the filing need to be made? California law indicates that the filing is made only in the county where the principal office is located and if the company does not have an office in California, in Sacramento County. Other states require that the filing is made in every location where the company is doing business under the assumed name.
North Carolina has a unique approach: The filing is made locally in a single county where it is doing business, but the registration is added to a central database, so it is easy to find. On the filing the company can indicate that they are doing business under the assumed name in all counties for the same fee.
No Registration Required
Currently 3 states, Kansas, New Mexico and South Carolina, do not require entities to register company aliases and have no protocols in place for doing so. The only case in these states where a different name is registered is when the true corporate name of a foreign entity is unavailable. This can be called a “forced fictitious name” to differentiate it from a voluntary assumed name.
Complications for Assumed Name Filings
While many states, particularly those with state-level registration for assumed names, offer an online process, assumed name filings are still more likely to have complex requirements, especially when local filing requirements need to be met.
1. Original Signatures Needed
For local filings, and sometimes where the name is registered using the same process as a state trademark, original signatures are often still required.
2. Getting the Correct Form
In states with local filing, each county and town may have its own specific form. As town and county websites are often less sophisticated than those at the state level, it can sometimes be challenging to even obtain the form needed to register.
Publication Requirements
The following states have publication requirements on initial fictitious name filings: California, Florida, Georgia, Minnesota, Nebraska and Pennsylvania, that must be handled before or after the assumed name registration is filed.
Business Alias Renewal Requirements
Unfortunately, most assumed name filings expire and must be periodically renewed (except for 11 jurisdictions where assumed name filings are perpetual). The most common duration for an assumed name, in approximately 22 jurisdictions, is 5 years.
Other jurisdictions have different renewal periods: Annual, 2, 3, 4 or 10 years. If a company is using business aliases in several states across the country, tracking various jurisdictional requirements and renewing these names can quickly become a chore.
Consequences of Not Properly Registering and Maintaining a Business Alias or Assumed Name
While proper registration and maintenance of business aliases can be a lot of work, it is an important step. In some states, companies face civil or criminal penalties for non-compliance with assumed name laws. An entity may have difficulty filing a lawsuit for business conducted under the assumed name if the name is not registered. Beyond legal implications, many banks require proof of assumed name registration if a company wants to open an account and receive cheques made out to the assumed name.
As you can see, there are many good reasons for using an alias in business, and many good reasons to ensure registrations and renewals are handled correctly.
FAQs
Are companies notified when it’s time for assumed name renewal filings?
Not always! Hawaii, Kentucky, Mississippi, South Dakota, Texas and Wisconsin currently have no processes for sending out renewal notifications. Other states do send out reminders to the addresses they have on file. Massachusetts, for example, considers these filings to be revenue producers for small towns so they are good about sending notifications in hope of better compliance.
Does every state use the same terminology to indicate the name of an entity that is not its true name?
States use different terms to refer to names used by entities that are not their true corporate names: Assumed Name, DBA, fictitious name, alternate name, and trade name are most common.
Unfortunately, the same terminology can often be used regardless of whether a company must use a different name to do business or a company voluntarily uses a name, in addition to the true name. As the associated procedures usually vary by state, this conflation of terms can often lead to confusion. To learn more, read our article, Assumed Name Registration: Doing Business Under a Fictitious or Assumed Name.
Do Companies File Assumed Names when they can’t use their legal name in a state?
Not always. Sometimes, a company will want to register to do business in another state and will find that they can’t use their true or legal name. In some states, they can choose a different name to do business under in the state, simply by entering it on the Application for Authority. In other states, they will need to separately register the name they wish to use by making an additional filing. For more information, refer to our blog, Entity Name Considerations When Doing Business in Multiple Us States.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
