The term ‘alias’ has interesting connotations, often evoking international espionage or nefarious activities. When people use aliases, we tend to think they are trying to conceal their identity.
For companies, there are several very legitimate reasons to use an alias or assumed name, also known as a fictitious name or d/b/a (doing business as) name. Most of the time, it’s not done to hide who they are but to use a name that is more reflective of the goods or services they are offering.
Depending on the scale of your business, that may be easier explained than done. Let’s say, for example, a corporation or limited liability company (LLC) owns three different restaurants, each with its own name. For the entity to operate those restaurants with different names, it would need to register each restaurant as an assumed name of the entity. If those restaurants exist in different towns, counties or states, the process can become quite complex.
State Level Registration
When forming or registering to do business, entities register their names with the appropriate state filing office. For approximately 35 states, this state level filing is the only requirement.
In most cases, a company files a certificate registering the assumed name with the state’s corporate registry (usually the Secretary of State). The registration filing is generally straightforward, asking for basic information on the assumed name to be used and the company holding the name. In most states, the assumed name will need to be available – that is, not already used by a registered entity in the state.
County Level Registration
Some states, such as Arkansas, Michigan, Texas and Virginia, require both a state and county level filing. Other states like Delaware and California, major corporate players, require only a county level filing. This may sound like somewhat of a relief, but county level filings can be more complicated. Here’s why:
- Original signatures needed. While states will often accept a scanned form, the states where a county filing is mandated require original signatures, meaning more time and trouble involved gathering those required signatures for submission.
- Getting the correct form. Each county is likely to have its own specific form. As town and county websites are often less sophisticated than those at the state level, it can be challenging to even obtain the form needed to register. Some California counties, for example, used to accept a generic form but those days are long gone. Most county clerk/recorder offices in California now have their own required forms available on their respective websites.
- Other requirements possible. For example, there are publication requirements on initial fictitious name filings in California, Florida, Georgia, Minnesota, Nebraska and Pennsylvania.
- Multiple filings may be needed. In certain states, multiple filings may be required depending on the number of business locations. In Arizona, Connecticut, Georgia, Massachusetts, Nevada and Virginia, an entity should file its assumed name in every town or county where it is used.
Other states, like Texas and California, only require that the entity file in the location of its principal office in the state. If the entity does not have a principal office in Texas, the address of the registered agent is used. In California, if there is no principal office in California, the assumed name should be filed in Sacramento County.
North Carolina entities need to file in only one of the counties where the business operates, indicating on the form all the counties where the name will be used.
Town Level Registration
Towns often have their own unique requirements. This adds the complications seen at the county level and multiplies the number of registrations that may need to be made. Sometimes a town will even confirm an entity is doing business at a particular address before approving an assumed name filing! In both Connecticut and Massachusetts, assumed names are filed at the town level.
No Registration Required
Currently three states, Kansas, New Mexico and South Carolina, do not require entities to register assumed names and have no protocols in place for doing so. The only case in these states where a different name is registered is when the true corporate name of a foreign entity is unavailable. This is called a ‘forced fictitious name’ to differentiate it from a voluntary assumed name.
Unfortunately, most assumed name filings expire and must be periodically renewed (except for eleven jurisdictions where assumed name filings are perpetual). The most common duration for an assumed name, in approximately twenty-two jurisdictions, is five years.
Other jurisdictions may require renewal every three years. If a company is using assumed names in several states across the country, tracking various jurisdictional requirements and renewing these assumed names can quickly become a chore.
Consequences of Not Properly Registering and Maintaining an Assumed Name
While proper registration and maintenance of assumed names can be a lot of work, it is an important step. In some states, companies face civil or criminal penalties for non-compliance with assumed name laws. An entity may have difficulty filing a lawsuit for business conducted under the assumed name if the assumed name is not registered. Beyond legal implications, many banks require proof of assumed name registration if a company wants to open an account and receive checks made out to the assumed name.
As you can see, there are many good reasons for a company to want to use an assumed name – and many good reasons to ensure registrations and renewals are handled correctly.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.