Do I need to register a Fictitious Name? This is a common question from sole practitioners, LLCs, and even nonprofit organizations.
Why Use a Fictitious Name?
Many small business owners, freelancers, and nonprofit organizations operate under a fictitious or “doing business as” name. There are many reasons for this, such as:
- increasing credibility for sole proprietorships
- creating a personal brand identity
- protecting your personal privacy as a freelancer
- rebranding under a new name when the original name no longer fits
- advertising different services provided by the same company
These are just some of examples of why businesses use a fictitious name.
What is a Fictitious Name?
A Fictitious Name is simply the name you use to conduct business other than your own name.
For example, Concerto Law is a fictitious name. However, the Law Office of Christine Jarzab Kuntz is not a fictitious name because it identifies who I am.
Who uses fictitious names?
- sole proprietors, freelancers, and consultants
- business trusts
- limited liability companies
- nonprofit organizations
Do I have to register?
If you register a business entity, such as an LLC, you do not separately register a fictitious name. Rather, the name you choose for the business is the ‘fictitious name’.
If you do not register a business entity and you want to use a name other than your legal name, then you must register the fictitious name.
How to register a Fictitious Name.
So, to reiterate, if you register a business entity with the state, you do not need to register your name.
On the other hand, you must register the fictitious name if you are a sole proprietor or unregistered partnership and your business name does not readily identify you as the owner.
Registration is simple.
- Visit the Pennsylvania Department of State website.
- Complete the Registration of Fictitious Name (DSCB: 54-311).
- Mail or electronically submit your application and the filing fee.
- Advertise your registration and fictitious name in the county legal newspaper, as noted on the form’s instructions.
- Obtain an EIN (tax identification number) for your fictitious name from the IRS.
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?
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:
Registering a fictitious name keeps you compliant with Pennsylvania law.
Access to Courts.
Registering allows your business to sue people. Failing to register will not invalidate your contracts. However, if you do not register, your business cannot file a lawsuit against another party until you register your fictitious name.
You many not want to advertise your business with your personal name. For instance, perhaps you are a private person by nature. Maybe your name is difficult to pronounce or spell. Perhaps your name brings unwelcome jokes or connotations in your particular business. Instead, use a fictitious name to convey a different image.
Rachel Samuelson’s Hair Salon is a perfectly fine name, but you may want to enhance your marketing and professionalism with a jazzier name.
Record keeping is easier when you record your income and expenses under the fictitious name. For example, you can quickly identify between personal and businesses expenses. If you have a business entity, such as an LLC, you can easily allocate and identify income and expenses between different business lines.
Here is what registration does not do:
No exclusive access to name.
You do not get 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.
No registered trademark.
Registering the name is not the same as registering a trademark for the name. There is a separate process to register a trademark.
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. Only a registered business entity (such as a corporation or LLC) will protect you from personal liability.
No assurance you do not violate another’s intellectual property.
Registering your fictitious name provides no assurance you also possess the trademark rights to that name.
The Department of State does not talk to the United States Patent and Trademark Office. This means that you can register a name in Pennsylvania that has a federal trademark. Pennsylvania won’t verify whether you have the legal right to use the 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.
Call Concerto Law for help.
Still confused? Undecided about whether your need to register your name? Call us. We can quickly answer your questions and get you on the track to legal compliance.