The choice of a company name should be one of the first things you make when beginning a firm. The perfect name may help build a powerful brand and draw in customers. However, it’s crucial to comprehend the distinction between a fake name and a company before registering a business name.
A fictitious name is a name that a business employs that is distinct from the legal name of the owner or owners, commonly referred to as a “doing business as” (DBA) name. This is frequently utilized by lone owners or partnerships who desire to conduct business under a name other than their own. If John Smith runs a landscaping company, for instance, he can decide to use the moniker “Green Thumb Landscaping” as his DBA name. The owner of a fictitious name who registers it remains personally liable for any debts or legal problems that may occur because it does not establish a distinct legal company.
A company, on the other hand, is a legal entity distinct from its owners. When a company incorporates, it establishes a separate legal identity with distinct obligations and rights. As a result, the corporation is able to possess property, sign contracts, and file lawsuits. The shareholders, who own a corporation, are not personally responsible for its debts or legal problems. Instead, the sum of money they have invested in the firm is the extent of their liability.
A crucial step in preserving a company’s reputation and brand is trademarking its name. A company name must be original and not in use by another company in order to be trademarked. This can be achieved by checking the availability of the name via a trademark search. An application may be submitted to the United States Patent and Trademark Office (USPTO) when the name has been cleared.
A DBA name is another term for a false name, as was previously mentioned. This phrase highlights that the name is being used by the company for marketing purposes and is not the legal name of the business owner. While corporations have their own legal names, sole proprietorships and partnerships frequently employ fictional names.
A sort of business structure where there is only one owner is a single proprietorship. Every component of the business, including any incurred debts or legal concerns, is individually accountable to the owner. In that the owner is directly responsible for the company, this is comparable to a fictional name. But unlike a corporation, a sole proprietorship is not a distinct legal body.
The procedure of registering a DBA name with the relevant government body is known as fictitious registration. In order to conduct business under a name other than the owner or owners’ legal names, this is required by law in the majority of states. False registration serves to increase transparency and stop fraud by letting buyers and sellers know with whom they are doing business.
For a sole proprietorship, you can indeed employ a fictional name or a trade name. The term “doing business as” (DBA) is also used to describe this. It is crucial to understand that registering a DBA name does not produce a distinct legal body, such as a company. It merely permits the sole proprietor to operate their firm using a name other than their own. It is crucial to confirm that the DBA name is available and complies with any rules by consulting local and state laws.
The term “business name,” frequently referred to as a “fictitious name” or “doing business as” (DBA) name, is applicable to sole proprietors. This name is used to distinguish the company from the owner’s own name and to identify it. It’s crucial to remember that establishing a fake name does not establish a distinct legal entity, as does doing so with a corporation, and the sole proprietor is still held personally liable for all business obligations and legal problems.