Are you a sole proprietor who has a great idea for the name of your business? Is it different than your name? If so, it’s essential that you understand what a fictitious business is and how to form one in your state*.
What Is a Fictitious Business?
Despite its name, a fictitious business is a genuine entity.
Sole proprietors must register the name of their business under their legal name. This isn’t necessarily a problem for someone who wants to incorporate their name into what they do.
For example, many freelancers don’t require additional branding. They’re happy for their business name to be, “John Smith.”
However, this doesn’t apply to most sole proprietorships. If you’re a lawn care professional, you’ll probably have a better chance of winning new business with, “Smith’s Professional Lawn Care” instead of your legal name.
Any time a sole proprietor uses a name other than the one on their driver’s license, they are using a “fictitious business name,” which requires taking specific steps to form.
How to Form a Fictitious Business in Your State
Fortunately, as you’re about to see, it’s effortless to form a fictitious business. Just follow these three steps.
1. Choose Your Business Name
The first step is easy: choose a name for your business. As long as it doesn’t resemble another entity’s name too closely, you shouldn’t have too many issues here.
2. Print Out Your DBA Form
Next, you need to fill out a DBA form. In most states, you can find your “Doing Business As” form on the Secretary of State’s website. Otherwise, you can pick one up at your county clerk’s office.
DBA forms are relatively straightforward, so you shouldn’t have too many problems here. You’ll also need to pay a filing fee.
3. Complete and File the Form
Where you need to file the paperwork for your fictitious business will depend on your state’s requirements. The easiest way to find which rules pertain to your LLC is to visit the Small Business Administration’s Choose Your Business Name page.
Some states may also require that you publish a notice of your company’s name in your local newspaper, so customers are aware.
Check to be sure you’re filing it with the right agency, as well. Again, in some states, this is done on the county level. In others, you do it with the state and, and in still others, you have to do both. You don’t want to land in trouble just because you forgot one of these requirements.
Furthermore, you may need proof that your LLC is in good standing before forming your fictitious business name.
Take the Time to Form Your Fictitious Business Correctly
Given how easy it is to follow all the legal requirements associated with forming a fictitious business, there’s no reason to skip this simple step, especially when you consider the penalties you’ll incur for doing so.
So, if you’re a sole proprietor with a great name in mind, go through each of the above steps and you’ll be on your way to operating under this new title.
*some states (ie. Kansas) do not allow DBAs/fictitious names