Does My Business Need to Register a Fictitious Name?
What is a Fictitious Name?
Attorneys are often asked whether a business needs to register a Fictitious Name. First, people are often confused about what a fictitious name is and isn’t. A Fictitious Name is simply the name you use to conduct business other than your own name. Fictitious Names are used by sole proprietors, partnerships, corporation, business trust, limited liability company, or other group of individuals or businesses.
That being said, whether you have to register is another matter. If you register a corporation or limited liability company (LLC) or partnership with Pennsylvania, the name of your business (the fictitious name) is part of your application. Those operating with no formal business entity, such as sole proprietorships or unregistered general partnerships are not automatically registered. Instead, they must file an application to register their name.
How to register.
So, to reiterate, if you are a corporation, registered partnership, limited liability company, nonprofit organizations, or unincorporated association, your Fictitious Name is registered when you file your application to be recognized as a formal business entity (i.e. file your Articles of Incorporation, Certificate of Organization, etc.) You do not need to register your name.
On the other hand, if you are a sole proprietor or your partnership does not register with the State and your business name does not readily identify you as the owner, then you must register your Fictitious Name with Pennsylvania. Register is simple. First, visit the Pennsylvania Department of State website and complete the Registration of Fictitious Name (DSCB: 54-311). Mail or electronically submit your application and the filing fee. Advertise your registration and ficitious name in the newspaper, as noted on the form’s instructions.
Simply registering a fictitious name is not the end. To maintain your fictitious name, you must file a Decennial Report of Continued Existence in years ending in 0 (i.e. 2020, 2030, etc.). Do not forget to file.
What else do I need to know about a Fictitious Name?
There are misconceptions as to what exactly a Fictitious Name does for you and your business. It is important to understand what Fictitious Name Registration does and does not do.
Here is what registration does:
- Compliance. Registering a fictitious name keeps you compliant with Pennsylvania law.
- Access to Courts. Registering allows you to sue people. Failure to register your fictitious name will not invalidate your contracts, but if you do not register, you cannot institute a court action (i.e. sue) the other party until you register your fictitious name.
- Privacy. You many not want to advertise your business with your personal name. Perhaps you are a private person by nature. Perhaps your name is difficult to pronounce or spell. Perhaps your name brings unwelcome jokes or connotations in your particular business.
- Professionalism. Rachel Jones’ Hair Salon is a perfectly fine name, but you may want to enhance your marketing and professionalism with a jazzier name.
- Recordkeeping. It is easier to separate your business and personal accounts, records, credit cards, invoices, and receipts when your business name and personal name are different.
Here is what registration does not do:
- No exclusive access to name. What a fictitious name does not do is it does not give you exclusive access to that name. There may be many John Doe’s in the state who have a small business under the name John Doe Accounting Services. It does not give you intellectual property rights over the name (there is a separate process to gain those rights).
- No personal liability protections. Registering also does not limit your personal liability. If you are a sole proprietor you are not shielded from personal liability for injuries, breach of contract, defective products, negligence, and so forth. Simply registering your fictitious name does not protect you. Instead, you need to form a business entity, such as a corporation, partnership, or limited liability company.
- No assurance you do not violate another’s intellectual property. Registering your fictitious name provides no assurance you also possess the intellectual property rights to that name. Rather, complex intellectual property laws will determine whether your name is confusingly similar to an already protected name. Unless your name is rather generic (i.e. Dave’s Accounting Firm), you should confer with an attorney to assess whether your intended fictitious name poses any risks to your business.
So, if you are a sole proprietor and using a business name other than your own name, you need to register your fictitious name.