How To Change A Business Name In 6 Simple Steps

Before changing the name of your business, ask yourself why do you want to change the name and what do you hope to achieve. Are you rebranding? Expanding into new markets? Distinguishing yourself from other businesses? Do you want to change your name because it better represents the values and vision of your business? Outlining these objectives and selecting a name that embodies the answers ensures your name change will be successful.

Once you have a clear sense of your objectives, conducting comprehensive research is crucial. Start by exploring existing businesses in your industry to ensure your new name is unique. You must check the following to ensure the new name does not infringe on anyone else’s business:

• Review your secretary of state website to ensure the name is available and follows all applicable rules
• Check the trademark office website to ensure the name hasn’t been trademarked

While not required, conducting a domain search to ensure you have exclusive ownership of your brand’s online presence is advisable as well. Also, consider the cultural connotations, linguistic implications and market perception of potential names. Make a short list of suitable options that resonate with your brand identity and review them thoroughly.

Understanding your business structure is essential when changing your business name because it affects the legal and procedural aspects of the name change. Different business structures have different requirements for changing the name. Consider the following when changing your business name.

Entity Name vs. Trade Name

Depending on your business structure, the name change might involve altering the legal entity name or the trade name. For instance, corporations and limited liability companies (LLCs) typically have registered legal names, while sole proprietorships and partnerships often operate under trade names. However, an LLC or a corporation may have trade names in the form of DBAs (Doing Business As) as well. This is an important distinction as the procedural requirements for updating the name may differ.

Operating Agreements and Bylaws

Many businesses have an internal document such as an operating agreement or bylaws that provide rules that address how to go about a name change. For instance, corporations often need to hold a shareholder meeting and allow voting members to approve a name change. An LLC may require a similar internal procedure with its managers. Even partnerships may have agreements on how a name change is to be approved.

The exception to this is sole proprietorships. They normally do not have any formal agreements as they are an unregistered business with one owner. It is important to review your internal documents and comply with any internal procedures before pursuing a business name change.

Changing a business name involves complying with legal and regulatory obligations as well. You must check with the secretary of state or county clerk’s office to understand the necessary paperwork for the name change. While the legal procedures and requirements vary based on your jurisdiction, below are some of the most common obligations.

Business Registration

As mentioned, different business structures (e.g., sole proprietorship, partnership, LLC, corporation) have varying legal requirements for changing the business name. Since a business is registered with a state, specific state rules will govern what you must do to change your business name.

Sole proprietors are unregistered businesses and are not separate entities from the owners. However, if you plan to operate under a different name than your own, you will likely need to register a fictitious name (DBA).

Partnerships often require an amendment to the partnership registration paperwork.

LLCs and corporations require an amendment to their articles of organization or incorporation.

Licenses and Permits

Ensure that all licenses, permits and registrations related to your business are promptly updated. Many industries, such as cosmetology, healthcare, food services, agriculture, real estate and construction, require specific licenses and permits. Applications typically require you to include evidence of your name change with the state and a fee. These updates must occur promptly to comply with legal obligations, as operating without them can lead to fines and, ultimately, the closure of your business.

Tax Authorities

Tax authorities must be updated about the business name change as well. Some of the authorities you may need to update are the IRS, the state employment tax department and the state unemployment office. For state agencies, you will want to contact the agency directly to get the information needed to update your name. To update your name with the IRS, you will need to file the following forms depending on your business entity type:

• Sole proprietors can notify the IRS by sending a signed letter to the address used to file Form 1040.
• Partnerships can notify the IRS by marking the appropriate box on the annual 1065 form or by sending the IRS a signed letter.
• Corporations can notify the IRS by marking the appropriate box on the annual 1120 form or by sending the IRS a signed letter.

LLCs are unrecognized entities according to the IRS. LLCs are either taxed as a sole proprietor or as a corporation. LLCs are, by default, taxed as sole proprietors unless a form 8832 or 2553 was filed. Which form you file depends on if you want to be considered an S-corp or a C-corp. If you are an LLC being taxed as a corporation, you must follow the name change instructions for a corporation.

Lastly, you need to update your Employer Identification Number (EIN) with the IRS. Simply changing your name does not require a new EIN number. To update your EIN, mail a signed letter to the IRS at the address you file your return with. If you are a partnership or corporation, you must attach a copy of your formal name change document from the state.

Once you have amended your articles of incorporation or organization, tax information, business licenses and permits, don’t forget to update the following legal documents.

Contracts and Agreements: Update any contracts or agreements that mention your business name. Notify the other parties involved and consider executing amendments or new contracts with the updated name.

Intellectual Property: If you have trademarks, copyrights or patents associated with your business name, consult with an intellectual property attorney to understand the steps to protect your intellectual property under the new name.

Banking and Financial Accounts: Inform your financial institutions about the name change. Update your business accounts, credit cards, loans and other financial arrangements to reflect the new name.

Business Insurance: Notify your insurance provider about the name change and update your business insurance policies to maintain coverage under the new name.

Employee and Payroll Documentation: Update employee records, payroll systems, benefits providers and any other employment-related documentation with the new business name.

A name change can necessitate a rebranding strategy. If needed, develop a comprehensive plan that outlines how you will communicate the change to your target audience. Consider updating your logo, tagline and other visual elements to reflect the new name.

Craft a compelling narrative around the name change to generate excitement. Don’t forget to update your website, social media profiles and marketing materials to reflect the new name. Stay attentive to customer sentiment and make necessary adjustments to ensure a positive reception of the new name.

You might want to consider registering a DBA (Doing Business As) instead of changing your company name. A DBA is a fictitious name that allows you to keep your business name but operate under a different name. It is an excellent tool for marketing purposes as it enables you to create other brands under one registered business. Here are some reasons why you might consider a DBA instead of a name change:

• Simplicity: You can operate your business using a different name while avoiding the legal and administrative hurdles that come with changing your legal name.
• Brand Flexibility: Avoid customer confusion, particularly when targeting specific market segments or introducing a new product line.
• Administrative Ease: Streamline your administrative processes and manage multiple businesses more efficiently.
• Cost Savings: Generally more cost-effective, requiring minimal paperwork and lower associated fees.
• Market Testing: You can gauge customer feedback, assess brand perception and make an informed decision about a potential full-scale name change.

Check out this guide for full details on how to register a DBA.

A business name change can have a profound impact, rejuvenating your brand and paving the way for future expansion. Changing the name of your business involves understanding and adhering to the specific requirements set by the state in which your business is registered. By following these six straightforward steps, you can embark on the name change process with ease.