You thought long and hard about your business name, but now you have a need to change. There are many reasons to change your business name, including moving to a new location and wanting a fresh start to changing what your business offers and needing a new name for branding purposes. For whatever the reason, you should first consider the legal implications of that change. The following legal considerations are important to take note of before you start the process of applying for a new business name.
Approval From the IRS
If you’re keeping the same business and just changing the legal business name, you have to first inform the IRS and get their approval. This involves sending in a written letter regarding your new business name, if you run a sole proprietorship. The form must have the owner’s signature on it. For a corporation or partnership, you should be able to change the business name by selecting the right box on that year’s tax return.
After informing the IRS, you will then need to contact your local and state business offices to change your name. If you originally filed your business name as a fictitious name, or DBA, then you need to follow the same procedure. In many ways, getting a new business name is like starting a new business, so all of these changes and legal considerations might not be worth it just for a new business name. You may also need to pay additional fees for the new name.
Changing All Accounts
The next legal consideration is having to change your business name with all financial accounts you have, including at your banking institution and online accounts. This can time consuming getting all the right paperwork filed. It is similar to changing your last name, where he new business name is going to require you to contact each bank or firm individually with your new business information. You cannot prepare payroll, file taxes, get business loans or do much of anything without first changing your business name with your bank.
Other things that require additional work include changing your business name on your website, blog, social media networks, newsletter, envelopes, shipping supplies, business cards, stationery, and anything else that you use in your business.
After deciding on a new business name, you need to do some research to be sure no other companies have it trademarked. Even if it isn’t exactly the same as another business, your new name might be too similar, and therefore trademarked from a major corporation. Start with an Internet search to make sure it is not used, then check to see if it has been trademarked by any other companies. Just because your local government and the IRS approved of the new business name, doesn’t make it cleared for trademark reasons. Once you’ve done this, be sure to speak to your business insurance agent about intellectual property insurance.
Now that you know the basic implications and guidelines of applying for a new business name, you can decide whether or not it is worth it for you. Do your research before choosing a business name. Also make sure to have proper business insurance coverage from potential litigation with your business under its new name.