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Our current business name is working well for us, but we’re starting to feel it’s time for a name change. Switching something so important to your business can be nerve-wracking. He explains his four main steps for changing a company’s name and the benefits this legal change brings.
Important points
- Business owners must complete an amendment to change their business name.
- After changing your company name, you will only need a new EIN if you also change the structure of your organization.
- Block Advisors can help you record company name changes in your BOI report.
Advantages of changing trade name
Before you understand how to change your business name, you need to know why you’re considering changing it in the first place. This process can be complicated, especially for small businesses that don’t want to get caught up in red tape.
The benefits of changing your trade name include:
Access to domain name
You may find that another company uses a domain name that most closely matches your current business name. By making changes, your online domain can find available names, making it easier to maintain consistent branding across all marketing channels.
Privacy for sole traders
As a sole proprietor, you probably needed to use your name as the company name when you set up your business. This may raise privacy concerns. Anyone who investigates your business knows who you are.
A name change may also involve a change of business entity, which protects your privacy.
business rebranding
In some cases, your business may need a fresh coat of marketing paint and your existing company name no longer serves you well. The business name change will be part of an overhaul and give the company a fresh start in the eyes of consumers. A business name change can provide more branding opportunities than your name or previous business name.
Current company name is no longer available
Entrepreneurs sometimes make mistakes. In some cases, mistakes can tarnish a company’s name to the point where customers no longer trust the brand. In these cases, changing your name can be an effective way to give your business a fresh start.
How to change your business name
Unfortunately, changing your company name is not as simple as deciding on a new business name and sticking with it. There are several steps you must take to approve the name change.
1. Check name availability and get internal buy-in
The first step is easy. Verify that the new name you want is available. Make sure your new name idea is available in the state in which you operate. Most states have online business databases for this purpose. For example, you can use the New York Corporation and Business Entity Database to see which names are already on record with the Secretary of State.
Buy-in from within the company is also important. You should consult other stakeholders in your business before changing your business name. In some cases, that’s necessary. For example, a limited liability company (LLC) typically requires you to propose changes to all other LLC members in accordance with LLC operating agreement guidelines. Similar rules apply if you choose to incorporate. The company’s board of directors must approve the name change before proceeding.
Let’s assume your name is available and you get the green light from an insider. Finally, you need to make sure you meet your state’s business naming guidelines. These rules vary by state, but typically include:
- Your business name should include certain words that indicate your company’s structure, such as “LLC” or “Inc.”
- The business name you choose should avoid prohibited words, such as profanity or words that suggest your company is a government agency.
- Your business name must be distinguishable from other names used within the state.
These naming conventions vary, so check your state’s regulations before deciding on a name.
2. Submit an amendment
Once you have chosen a new name for your business, the next step is to fill out an amendment to request a change, or a state-specific equivalent. This form is essentially a way to formally request the Secretary of State to change the information you originally provided in your articles of organization or articles of incorporation.
The specific name of this form may vary by state. For example, New York State calls this document a “certificate of amendment,” which is functionally the same as an amendment.
Typically, you will submit the form along with the filing fee to the Secretary of State. In many cases, amendments can also be used to change the official business address or change the name of the new registered agent, although some states do not allow for these purposes. We have another form available.
3. Notify the IRS
The Internal Revenue Service (IRS) uses a company’s legal name as an identifier when filing tax returns. Therefore, when proceeding with a business name change, you will also need to communicate the new name of your company.
This can be done in two ways.
- Write a letter to the IRS to notify them of your name change. Be sure to enter the same IRS address that you will mail your tax return to (if you are filing a paper tax return).
- Use this year’s tax return to notify the IRS of your name change.
Sole proprietors and certain LLCs should use option #1. This is because they do not file business taxes. Instead, their taxes will be reflected on their personal tax return. However, corporations and partnerships can use the current year’s tax return (Form 1120, Form 1120-S, or Form 1065) to indicate the name change.
Don’t want to go down either route? You can also notify the IRS directly. However, this notice must be signed by an executive officer or a partner of the firm.
Notes on EINs
If you change your company name, you may need to apply for a new Employer Identification Number (EIN). However, this is usually only the case if the name change is accompanied by a change in business entity. For example, if you switch from an LLC to a C Corporation. In this situation, you will need a new EIN because the company structure changes.
In some situations, you may need to file your old company’s tax return when you apply for a new EIN and close your old EIN. If you need to apply for a new EIN, be sure to consult a tax professional to ensure you meet all requirements.
Finally, your state’s Department of Revenue or Taxation may require you to update your business name if you make changes. For example, if you own an LLC in New York and change your business name, you will need to update your LLC’s tax account.
4. Update business documents
Once you complete the amendment and notify the IRS, your new business name becomes official. It is then your responsibility to ensure that those changes carry over across your Materials and account. Please use extreme caution. Generally, any mention of your name previously used in anything related to your business should be changed.
Below are just some of the documents or materials you should be aware of.
- Business bank account opened using the company’s previous name
- Marketing materials and channels from websites and social media to physical marketing such as billboards.
- Legal permissions related to the company, such as business licenses or permits provided by state or local governments
- Contracts and legal agreements bearing old names, such as LLC operating agreements
If you find valuable documents that use your company’s old name, you should create an updated version with the new name.
Consider DBA
A formal business name change requires a lot of paperwork, which may seem too burdensome (or too expensive) for many small business owners. Thankfully, there is another option: a “doing business as” (DBA) name.
A DBA, also known as a “pseudonym” or “trade name,” is a fictitious name that you can use for business without changing your legal name. Many states allow more than one DBA. Typically, you apply to each DBA using a state-specific form. Using a DBA allows you to minimize changes to your business documents. There may be less paperwork involved than if you changed your business name completely.
A DBA is ideal if you want to rebrand your company or operate under a new name. Obtaining a DBA is not necessarily a substitute for a formal name change, such as a change due to a change in business entity.
Remember to update your BOI report
January 1, 2024, the Corporate Transparency Act was enacted. The Financial Crimes Enforcement Network (FinCEN) has begun accepting mandatory Beneficiary Information (BOI) reports. Specifically, a BOI report is required if the company is a legal entity established with the Secretary of State, such as an LLC or corporation. You may also want to seek the advice of an attorney who can consider your specific situation and guide your decisions to ensure you are doing the right thing for you.
This report is used to name internal beneficiaries. Beneficial owner is an individual who directly or indirectly exercises substantial control over the reporting company or owns or controls at least 25% of the company’s ownership. Beneficial owners therefore include those who are the legal owners of the company and those who have substantial influence over the company. Failure to submit her BOI report to FinCEN may result in financial penalties and up to two years in prison.
Failure to report a name change may result in penalties. You must update the new name on your BOI report within 30 calendar days of the official change. This includes changing the DBA or obtaining a new DBA.
Failure to meet these deadlines may result in prosecution by FinCEN for not meeting reporting requirements. To avoid penalties or issues, please notify us of changes as soon as they are made using the FinCEN website or a third-party service (such as the Block Advisors Beneficial Ownership Information Reporting service).
Stay Compliant – Update Beneficiary Information
FAQ
How do I change my business name?
You can change your business name by filing an amendment with the state or filing a fictitious name with the DBA.
How much does it cost to change my company name?
Application fees vary by state. Typically, you can expect to pay between $30 and $100 to change your company name.
Can I change my business name and keep the same EIN?
In most cases it is possible. One of the main exceptions is when the name change involves a change in business entity. If your business entity changes, you may need to apply for a new EIN from the IRS.
How can you successfully rename your business?
After confirming name availability, be sure to file the appropriate state-specific forms and notify the IRS and FinCEN of the change.
How do I change my business name on Facebook?
Assuming you have administrator access to your Facebook page, open your business page and click the ellipsis. Select Edit Page Information, then select Overview, then select the Edit button next to the page name. Enter the new name, click Continue, and then press Request Change.
How do I change my business name with the IRS?
To change your business name with the IRS, you must either send a name change notice to the address where you file your tax return or note the name change on the tax return itself.
This article is for informational purposes only and should not be construed as legal advice. We recommend that you seek the advice of an attorney to evaluate all relevant considerations.
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