Is it possible to change your business name after incorporation? For businesses that have incorporated as a registered corporation or LLC, the short answer is yes.
Is it difficult to change a business name? Changing a business name may sound intimidating, but the process shares more similarities with naming a small business than one might think. If you are ready to change the name of your small business, focus on the following areas as you make the name change.
1. Understand why you’re changing your business name
Naming, or re-naming, a small business is a thoughtful process that takes time and research to properly complete. The name of your business is meant to be unique and differentiate you from your competitors.
If you are changing the name of your business, you’ll need to be confident that this change benefits the company and its customer base in the long run. Here are a few questions you may ask yourself before starting the name change process. This helps ensure you and the business are ready for the change.
- Did you name the business after yourself? It’s okay if you say yes! Some entrepreneurs start a small business that they name after themselves. Over time, they may find it’s a good idea to conduct a name change in favor of a more professional-sounding business name.
- The current name doesn’t reflect your mission or values. Did you start a business with a certain mission or purpose in mind only to find it has changed over time? A name change will help put you back on the right path to the identity of your business and the goals you are working to achieve.
- The business name is not sticking with customers. Customers may be struggling to spell, pronounce, or remember the name of your business. The less brand recognition you have, the more likely you are to struggle to retain your audience.
- You’re rebranding. The business you started has changed since its inception. As such, you’re planning to rebrand. A name change is just the beginning of a complete brand refresh!
2. Conduct a name search
You have a pretty good idea of why you want to go through the process of a name change.
The next couple steps are like that of naming a small business. Brainstorm some business names and jot down a few options. Then, conduct a name search for their availability.
You may look through a trademark database like USPTO’s Trademark Electronic Search System (TESS) or work alongside a third-party trademark filing services provider to determine if this trademark has already been registered or applied for or if it is available for use.
As you conduct a name search, check in with the Secretary of State where you do business. You’ll want to make sure this business name is available and that your business is following the state’s rules for naming a small business. For example, a business incorporated as an LLC may need to identify itself as “LLC” or “L.L.C.” in its business name.
It's also a good idea to conduct a domain name search. Check if the domain name, and preferred social media handles, are available for your new business name.
3. Obtain approval
In an LLC, the members (owners) must approve a name change. Businesses incorporated as a corporation must also receive shareholder approval before a name change.
You may obtain approval through a resolution for a change of name of the company. Make sure you review corporate bylaws (corporation) or LLC operating agreement (LLC) for further details on name change approval.
4. Notify the Secretary of State and contact the IRS
Once the members and shareholders agree to the name change, it is time to notify the state and contact the IRS. Let’s break down what companies incorporated as corporations and LLCs should know about these notifications.
- Notifying the Secretary of State: To change your business name with the state you do business in, you must prepare articles of amendment. This document notifies the state that the company is changing its legal business name. You will pay the associated filing fees and submit these documents to the state. Once the articles of amendment are approved, the name change will be official at the state level.
- Contacting the IRS: You must notify the IRS about the business name change for federal tax purposes. Different actions will be required depending on your entity formation. A corporation, for example, will need to mark the appropriate name change box of Form 1120 when the business files its current year return.
5. Determine if you will need a new EIN
The IRS assigns incorporated businesses an employer identification number (EIN). This number is a federal tax ID that tracks the payroll activity of a small business.
Some name changes may require new EINs, depending on the situation. Check with the IRS to determine if your business needs to apply for a new EIN.
6. Update business licenses and permits
What happens to your existing business licenses and permits under a new business name? Reach out to your local city or county offices to determine if you need to apply for new licenses and permits or cancel existing ones.
7. Speak with a legal professional
It’s almost time to share your new business name with the world! Before you begin sharing the news with your customer base and updating business signage accordingly, it’s important to meet with an attorney first.
Inquire if there’s anything else left to do before announcing the name change. For example, you might need to amend your existing LLC operating agreement or corporate bylaws with the new business name. You may also need to contact your bank and determine whether you’ll need to open a new business bank account.
Final Thoughts: Consider a Doing Business As Name (DBA)
Let’s say that you are content with your legal business name. However, you would like to operate under another business name you find more accurately represents a subset of your business. You would not need to file for a formal name change in this situation. Instead, you might consider filing for a Doing Business As name (DBA).
A DBA is a name that identifies a business. Essentially, it allows business owners to operate and receive payments under a different name than their legal business identity. Obtaining a DBA makes it easy for business owners to add additional lines of business as the company grows and expands.
Depending on the needs of your business, you may find you may be a good fit for a name change or may find it’s more advantageous to file for and register a DBA.
This article was written by Deborah Sweeney and originally appeared on Score.