How Your Assumed Business Name Might Be a Problem
“What's in a name?”
As a business owner, new or otherwise, you know that choosing the right company name is a crucial (and sometimes nerve-racking) step toward establishing yourself. Along your business journey, you may have heard the term “assumed business name” or even “doing business as.” But, what does that mean? And what could it mean for your business?
We have reached out to our attorney friends for guidance. And so should you. The safest way to make certain you are covered is to speak with your attorney.
What Is An Assumed
Business Name?
First, we need to define the term assumed business name. If you’re using a company name that doesn’t match the legal name on your tax returns, you’re using what’s known as an assumed business name. An assumed name is also called a fictitious name or a “doing business as” name.
If you're a business owner operating under assumed names, you need to know that North Carolina enacted the Assumed Business Name Act back in 2017. While the Act flew under the radar of many, this year, businesses operating under an assumed name could face severe consequences.
As a result of this 2017 Act, any business that is currently operating under an assumed name must re-file a new Certificate of Assumed Business Name on or before December 1, 2022. After this date, all existing certificates will expire and become invalid. Refile at your local Register of Deeds Office to keep the name active on the assumed business name statewide registry.
If your business is currently operating under an assumed name but you have not already filed a certificate, you need to file one immediately.
What Must My Assumed Business Name Certificate Include?
The assumed business name.
Your legal name or the legal name of the person operating the business under the assumed business name.
The nature of the business.
The street address of your primary business location.
Each county where the assumed business name is or will be used to engage in business.
What Are the Consequences
If I Do Not File?
Our attorney friends remind us that you may not be able to avail yourself of all laws if suing. Further, failing to file an assumed business name certificate will make you liable for the reasonable expenses, including attorneys' fees, incurred by any person who is injured by the failure when trying to obtain information within the assumed business name certificate.
If you operate in other states, many have the same rules requiring registration of an assumed name.
How Do I Refile a New Certificate of Assumed Business Name?
Under the Assumed Business Name Act, a business has the option to file simultaneously in every county or combination of counties in North Carolina with a single filing. This option is great for businesses with a statewide presence or those trying to expand their market.
Up to five assumed names for the same business making the filing can be filed in a single certificate. There is a searchable electronic database available through the NC Secretary of State’s website. This digital database makes it easy to find all assumed names filed on or after December 1, 2017.
Don’t expect a formal notice or announcement either. Unfortunately, there will not be an update sent to existing holders of assumed names informing them of the requirement to re-file their assumed names by December 1, 2022. If you’re a business owner you must be proactive. Re-file a new assumed name certificate with the Register of Deeds before the deadline. Luckily, you can find downloadable forms that make refiling simpler on the NC Secretary of State’s website.
To Recap
If you filed an assumed business name with your local Register of Deeds Office before December 1, 2017, you must refile to keep the name active on the assumed business name statewide registry.
Please contact your attorney or reach out to us at Holden Moss Knott Clark & Copley P.A. for a referral. If you would like more information about business management or financial strategies, give us a call for a no-risk discovery session. Call (919) 556-6216 or contact us via email at admin@holdenmoss.com. We look forward to working with you.