A business may operate under a name other than the one that is officially registered, which is referred to as an assumed name, fictitious name, or doing business as (DBA) name. Various uses for this term include branding and marketing initiatives. It is crucial to remember that choosing a fictitious name has no effect on the business’s legal makeup or on its ability to receive legal protection.
If a company is neither a corporation or a limited liability company (LLC), it is not necessary for it to register an assumed name. A Certificate of Assumed Name must be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA) if a company or LLC wishes to conduct business under a name other than that which is legally registered. In Michigan, partnerships and sole proprietorships are not required to register an assumed name, although they may do so if they desire to conduct business under a name other than the owner’s legal name.
There are a number of alternatives to take into account when deciding on a legal structure for a business, including sole proprietorship, LLC, and corporation. The decision will be based on the particular demands and objectives of the business owner, as each has advantages and disadvantages of its own. The simplest and least expensive alternative is a sole proprietorship, but it provides little protection from personal liability. Compared to sole proprietorships, LLCs offer greater flexibility and protection, but they are more expensive to establish up and manage. Although corporations are the most complex and expensive choice, they provide the most protection from personal liability.
If a company chooses to adopt a fictitious name, it may also think about becoming an LLC or a corporation. Both LLCs and corporations are permitted to use assumed names, but the decision will be based on the particular requirements and objectives of the company. Because they offer protection from personal liability and flexibility in management and taxation, LLCs are frequently the choice for small firms. Larger enterprises with complex ownership structures that need to generate cash through the selling of stock are better suited for corporations.
A DBA registration in Michigan normally remains active for five years following the date of filing. If the business owner wants to keep using the DBA name after five years, they must submit a new Certificate of Assumed Name. It is crucial for businesses to follow the proper registration processes since failing to register an assumed name when required might result in fines and legal consequences.
In summary, an assumed name is a name that a company uses that is distinct from the name that is legally registered under it. It is nonetheless crucial to comprehend the legal ramifications of using an assumed name and to follow the correct registration requirements, even though businesses in Michigan are not required to register an assumed name unless they are a corporation or LLC. It is crucial to weigh the benefits and drawbacks of each option when selecting a legal structure for a business and to go with the one that best serves the owner’s interests and objectives.
In order to conduct business under a name other than their legal name, a lone owner or partnership may use a DBA (Doing Business As). A sort of legal structure called an LLC (Limited Liability Company) can be utilized to carry on business as a distinct legal entity and offers its owners limited liability protection. The primary distinction between the two is that an LLC offers limited liability protection while a DBA does not.