Before you register your business, you'll need to register your business name. Why? The legal name of your business is required on all government forms and applications, including your application for employer tax IDs, licenses, and permits. The U.S. Small Business Administration offers these tips to help you determine what the government will accept as your business name:
- If you are the sole owner of the business, the legal name of the business is your full name.
- If your business is a partnership, the legal name is the name given in your partnership agreement, or the last names of the partners.
- For limited liability corporations (LLC) and corporations, the legal name is the one that was registered with the federal or state government.
Giving Your Business a Fictitious Name
However, if you want to open your shop or sell your products under a different name, then you may have to file a "Fictitious Name" registration form with government agencies.
A fictitious name is a business name that is different from your personal name, the names of your partners, or the officially registered name of your LLC or corporation. "Doing Business As," "DBA," "Assumed Name," and "Fictitious Name" are all terms used to describe the process of registering a legal name for your company.
For example, Joe Brown is the sole proprietor of a residence cleaning company, and he works out of his home. Joe wants to name his company The Home Cleaning Experts, instead of using his business's legal name, which is Joseph Brown. To do so, Joe must register the name as a fictitious business name with a government agency. Once it's registered he can use it to fill out line two, "trade name of business," on IRS Form SS-4: Application for Employer Identification Number. However, depending on the state in which his business is located, he may also need to register the fictitious name with his state government or with the county clerk's office.
Consult with your attorney or accountant to make sure you have filed the appropriate forms needed to register your new business name. Or, visit the U.S. Small Business Administration website for more information on federal and state requirements.