Registering a fictitious business name allows a company to conduct business under a name separate from established legal names. Different regions have different regulations on the use and management of fictitious trade names, and it may be necessary for companies with co-owners or those who want to include part of their name in the title. Applying for a fictitious trade name involves submitting a form and fee to the proper authorities, and in some regions, supporting material is also required.
The term “fictitious trade name” may make a company sound like a front for the Mafia, but it is actually a legitimate form of business registration that is quite common in many regions. Registering a fictitious business name allows an owner, partnership, or corporation to conduct business under a name separate from established legal names. Different regions have different regulations on the use and management of fictitious trade names; a county clerk can be a good source of information on where to find the necessary forms and what regulations apply.
The simplest form of a fictitious business name occurs when a person wants to open a business that doesn’t have their name in the title. If Joan Applewood wanted to open a bakery called “Shortcake,” she may need to register “Shortcake” as a fictitious business name. The registration creates a record linking the legally responsible party to the company name stating that Joan is doing business as Shortcake, thus making ownership easy to trace. In several countries, the laws that require fictitious registration can be defined as “doing business as”, “trading as” or “operating as” laws.
When forming a shell company becomes difficult it is if a person wants to include part of their name in the title of the business. Generally, if a person uses his full name in the title, such as “John Doe’s Tire Shop,” creating a fictitious business will not be necessary. But if the owner wants to call the company “John’s Tires” or “JD’s Tire Shop”, it may be required to register in certain regions. Many jurisdictions will forfeit registration if the owner’s surname is in the title, but not if only his/her first name is used.
A fictitious trade name may become necessary for companies that have co-owners but do not wish to list all of their names in the title. Names like “Jones and Associates,” “Donovan Group” and “Brown and Sons” imply that there is more than one owner and may or may not require registration. State and state laws can have very different interpretations of this issue; which makes it very important to study the applicable laws carefully.
In some regions, applying for a fictitious trade name is done simply by submitting a form and a fee to the proper authorities. In some regions, supporting material is also required proving that the listed owner is the legal owner of the proposed company. California business law also carries an unusual requirement that the owner publish the business name notice in local newspapers for several weeks.
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