A fictitious business name is one that’s legally used to identify a business entity but doesn’t specify the actual person that owns the business. Such names are used for separate businesses operated by the business owner without having to register another name.
This article discusses the concept of a fictitious business name, its benefits, and its requirements.
What Is a Fictitious Business Name?
A fictitious business name, also known as “Doing Business as,” is a business’ legal name used in place of the owner’s legal name. For corporations, a fictitious business name is any name different from the corporate name stated in its articles of incorporation. Fictitious business names are ideal when more than one person owns the business. It is also typical for marketing purposes or to hide the owner’s name.
Such a name has a legal existence separate and distinct from a person or corporate entity. A fictitious business name does not include the full name of the owner, the names of its partners, or the nature of the business.
Examples of Fictitious Business Name
“Andrew & Sons” is a fictitious business name. The owner’s surname is left out, and the words following the owner’s first name suggest other owners that are not specified. “Andrew Thompson Appliances” is not fictitious because “Andrew Thompson” is the owner’s legal name.
Other examples of fictitious business names are:
- James Lionel operating his construction company under the name “ABC Construction.”
- Williams Spikes, doing business as “Food corner.”
Benefits of a Fictitious Business Name
Select a fictitious business name if you’re starting a new business and want to hide your identity when conducting business transactions. A fictitious business name helps prevent trademark infringement that could lead to a costly lawsuit.
Using such a name is how business owners protect their identities and avoid presenting their real names to the public. It provides the business with a level of privacy and autonomy. For example, members of a rock band may not want their identities to be published in the local newspaper.
Fictitious business names are ideal when more than one person owns a business. Instead of listing all the names of its partners and owners, a fictitious business name is more appropriate.
Additionally, fictitious business names can be used indefinitely. A business owner can venture into a different industry but use the same name as their current business. For example, Philips & Associates doesn’t specify the line of business and can serve any other company.
Requirements for a Fictitious Business Name
Creating a fictitious business name is the responsibility of the business owners. You can use the name to convey your business message or represent your personality. A long or difficult name can negatively affect the business. If the name has no meaning at all, it can be confusing to prospective customers. It would be best to use an intriguing name that’s short, easy to remember, and attracts customers.
You’ll need a Fictitious Name Statement if you’re doing business under an assumed name. This is required by law to link the name of a company to the business owner. You’ll need to register the business with a county or district attorney. Upon registration, a Fictitious Business Identification Number (‘FBIN’) is assigned, which is only eligible to the business owner.
A Fictitious Business Certificate is a legal document showing the operating name of a company rather than its owner’s legal name. This certificate issued upon registration of a fictitious business name indicates a business’ legal rights to all its customers, vendors, suppliers, and contractors. Fictitious business names have legal standing, which means they will be recognized as separate legal entities and traded on the public market.
A fictitious business name is ideal when the business owner wants to use a separate name from their name. The typical use of a fictitious business name is to prevent consumers from associating with or knowing the business owner. Such names provide privacy to a business owner and can be used for separate businesses owned by the same person.
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