After reading the Rosten Law blog on choosing a name for your small business, a reader asked what a small business owner should do if he or she is no longer satisfied with the name already chosen and registered. From a legal standpoint, you have some options. From a business perspective, changing the name of your small business can be a hassle.
The real challenge is going around and informing vendors, customers, banks, and business associates that you have changed the name of your business and that you want them to switch over the name of the business on their internal records to a new name. If you thought that it was an issue getting your vendors and clients to change your address after a move, wait until you send around a request for them to start calling your business something different!
All of the work you have done to generate organic traffic to your website is out the window. Well, not 100% because you can still redirect the traffic to your new website, but then your customers are going to wonder why if they clicked on XYZ Corporation, they end up on the website of ABC & Associates.
Nonetheless, you have decided that you must change the name of your small business. You should first review the considerations that we enumerated in our blog on how to choose a name for your business.
The legal aspects of changing the name of your small business are relatively straightforward. You have at least three choices.
Start all over with a new business: not recommended
You can start all over of course and establish a whole new entity and close down the old entity. For most businesses, that is way over the top of what you need. There are two other much easier alternatives.
Officially change the name of the business
You can file a name change with the Secretary of State or the Department of Corporations in the jurisdiction in which your small business is organized. You can request your small business lawyer to file the name change. During this process your attorney will check to see whether your new name is available. Your attorney will redo the operating agreement or bylaws to reflect the new name. You will need to let the Internal Revenue Service know of the change. If your small business is a partnership, you can let the IRS know on the partnership income tax return (Form 1065) or write to the IRS at the filing address. If your small business is a corporation, then you would let the IRS know by the corporation’s income tax return (Form 1120) or write to the IRS at the filing address.
File a DBA or trade name
The final alternative is to file a “doing business as,” known as a DBA or trade name, with the jurisdiction in which your small business is registered. In Washington, D.C., an entity can register its trade name with the Department of Consumer and Regulatory Affairs. The legal name of your limited liability company or corporation or partnership remains unchanged, but your business can use its trade name with the outside world.
The better approach is not to change your name; but if you have to change your name, you may have to take some steps to let the appropriate state agency know and let your customers, bank, and many others know of the new name.