Looking for info on how to change the name of your LLC? We are here to help.
LLC Name Change Process: A Complete Guide
LLC (Limited Liability Company) owners may want to change the name of their business for a variety of reasons. If you are looking to change the name of your LLC, read below for a breakdown of the entire name change process as well as a few recommendations on the best time to do so.
Don’t have your LLC yet? Check out our guide on starting your LLC.
Why Should You Consider Changing The Name Of Your LLC?
There are many reasons why you would consider having the name of your LLC changed. Here’s a list of some of the main ones:
Correcting a Mistake:
If the name of your business, as it appears on your business registration documents, was misspelled, you might consider having it changed.
To Enhance the Uniqueness of Your Brand:
Your company’s success and growth may be hindered if people find it hard to tell apart from your brand and that of another business. Therefore, changing it makes a lot of sense.
A Move Towards Changing Your Strategy, Products, Industry, or To Support Expansion:
A new name may be more suitable if your original company name appears to be an impediment to further success. Think of a company that deals in the sale of books, having the word “books” included in its name, for instance. The proprietor may want to change the name to something that does not include the word “books” if the company adds new services, like selling movies, to its offering. If your company grows beyond a region, state, or city that is mentioned in its current name, or you switch to an entirely new industry, you might start thinking about changing the name.
Revising A Legacy Name:
Your business may no longer be properly represented by its current name – especially if the name includes the name of an individual who is deceased or has exited the company. However, the death of a founder does not necessarily create the need to change the name. Company names like Johnson & Johnson and Walt Disney, and many others, have outlived their founders with great success.
Resolving Issues Related To Trademark Infringement:
You may be ordered to change the name of your business by a court if it closely resembles that of another company in the same industry.
A Move Towards Rebranding:
Rebranding your business may be necessary in some cases. “Backrub” was the initial name for Google, for instance. You will agree that the phrase “Google it” sounds much better than saying “Backrub it”! You can enhance brand awareness by choosing a name that is easier to remember if you are currently using a name that is too generic. Changing the name may also be a good idea if you think that your business can gain from rebranding.
Get A DBA “Doing Business As”
In some states, the terms assumed name, trade name, and fictitious name are used in reference to a DBA. It is worth noting that a sole proprietorship, not a business, is formed by filing a DBA. A Limited Liability Company may want to file a DBA in some instances. For instance, the name of your limited liability company might be MK Enterprises LLC, but you want to open a bookstore and trade under the name MK Books. The name MK Books can be used if MK Enterprises files for a DBA for the same. While MK Enterprises LLC remains the same, MK Books becomes somewhat of a nickname for the company. Registering a DBA is a good alternative for when you don’t need to change the company name.
When deciding whether to register a DBA or not, consider the following guiding factors:
You don’t need to file a DBA if your limited liability company will run and do business under its legal name. However, if you don’t intend to use your LLC’s true name, you should consider registering a DBA. On the other hand, you might need a DBA for each separate business or microenterprise that you intend to operate under your LLC. If the continued growth of your business affects its exposure to liability, you should seriously consider registering a new limited liability company.
You may also benefit from registering a DBA if you are operating numerous stores, with different names, under one LLC.
You will need to create a limited liability company with your name of choice if you want to operate a franchise business. But, you will need to use the franchise name (as the name of the business) since it is a franchise. As such, your limited liability company will need to register a DBA using the name of the franchise. It is worth remembering that you are only using the name of the franchise and its trademark only because you have an agreement to do so. Registering a DBA that infringes on another business’s trademark is not possible.
There are many other reasons why you may be considering filing a DBA, on top of the main ones highlighted above. Consult a legal professional if you are still not sure whether registering a DBA is the right move for you. Learn about LLC holding companies.
Changing Your Company’s Brand
You will need to create an entirely new identity and image for your business, in addition to changing the name when rebranding. People’s perception of your business and what they associate it with is greatly influenced by its brand.me.
Reasons Why You Might Want To Change Your Company’s Brand
An evolving brand portfolio, creative challenge, updating an old/outdated image, venturing into new territories, addressing a bad reputation or scandal, acquisitions and mergers, a new CEO, and business repositioning, are some of the main reasons why you might consider rebranding your business. You should take the time to plan and implement a rebranding strategy that goes beyond simply changing the name of your business, regardless of the reason you have chosen to rebrand.
Perfect Timing For A Business Name Change
Before you go ahead, take the time to assess each aspect of the name change because changing the name of your business may require a lot of resources. The following factors will help you make a decision on the best time to change your business name, if and when you decide to do so. They include:
The Reason For The Name Change
The reason behind the name change will give you an idea of when to implement the change. As previously mentioned, there are many reasons why you may decide to change the name of your LLC, including trademark issues or entry into a new market among others. For instance, you might need to make an immediate name change, if you have been ordered to do so due to trademark infringement.
The Cost Of Changing Your Business Name
The cost of anything else that is included in your company names, such as the letterhead, a new website, signage, and logo, is included on top of that of registering a DBA or simply amending your operating agreement. Your financial status will determine whether you can actually cover the costs associated with changing the name of your business.
Benefits And Drawbacks Of A Name Change
Some of the benefits of a business name change include growing revenues and establishing or re-establishing consumer trust. Drawbacks include the detailed planning and implementation process as well as the cost of changing the name.
Your Brand Strategy
Your brand and the promise it makes to consumers should be perfectly aligned with your new business name.
Changing the name of your business may be an immediate requirement that you must abide by in some cases. You may also believe that the success of your business is reliant on a name change, in other cases. The best time for a business name change should be when the pros outweigh the cons, in such cases.
Business Name Change Process
Here is a step by step breakdown of the steps you should follow when changing the name of your business:
1. Start by checking your company’s operating agreement: The specific process of changing the name of your business may be contained in your company’s operating agreement.
2. Formation of a member resolution: To ensure that you remain with a written record, it is important to document the name change.
3. Register a name change with the necessary state authority: To change the name of your company, you must submit the necessary documentation in your state. This step calls for the submission of a change to the company’s articles of organization.
4. Filing fee payment: For the documentation on your name change to be processed, most states require you to pay a filing fee. The fee which ranges from 20 to 150 dollars, varies from state to state.
5. Submit the new name to the IRS: You should file your name change with the Internal Revenue Service, once you have submitted it to the state and received approval. Visit the IRS website and look for any requirements relating to your specific company/LLC, as the requirements normally vary depending on the type of business you are operating.
6. Spread the word: Once you are done with all of the above, it is upon you to inform your clients, lenders, vendors/suppliers and any other third parties you normally work with, about the new name.
Conclusion
You might be thinking about changing the name of your business due to a variety of reasons. To facilitate a seamless transition to a new name, it is recommended that you follow the above process, once you decide to change the name of your business after analyzing the main influencing factors. Reach out to a qualified attorney, if you need any clarification or assistance when it comes to changing the name of your LLC.