Your current business name has served you well, but you’re starting to feel like it’s time for a name change. Switching something so vital to your business can be nerve-wracking. Discover the four main steps to amending your company name and the benefits that can come with this legal change.
- Business owners must complete the Articles of Amendment to change their business name.
- After changing your company’s name, you only need a new EIN if you’ve also changed the organization’s structure.
- Block Advisors can assist you in recording your business name changes in your BOI report.
Before understanding how to change a business name, you’ll need to know why you’d even consider the switch in the first place. The process can be complicated, especially for a small business that doesn’t want to get bogged down in paperwork.
Here are a few of the benefits that come with a business name change:
Access to a domain name
You may find another company has taken the domain name closest to your current business name. By making a change, you can find a name for which an online domain is available, making it easier to maintain consistent branding across all your marketing channels.
Privacy for your sole proprietorship
As a sole proprietor, you likely had to use your own name as your company’s name when setting up your business. That can create privacy concerns; anybody who researches your business knows who you are.
A name change, maybe accompanied by a business entity change, protects your privacy.
Rebranding for your business
Sometimes, your business needs a fresh coat of marketing paint, and your existing company name no longer serves you. Changing the name of your business can be part of a complete overhaul, giving the company a new start in the eyes of consumers. A business name change may offer more opportunities for branding than your name or your previous business name might.
The company’s current name is no longer usable
Entrepreneurs occasionally make mistakes. Sometimes, mistakes can tarnish the company’s name to the point where customers no longer trust the brand. A name change works well in these cases to give the business a fresh start.
Unfortunately, changing your company name isn’t as simple as settling on a new business name and rolling with it. There are several steps you must go through to get the name change approved.
1. Check your name availability and get internal buy-in
The first step is simple— check that your desired new name is available. Ensure that your new name idea is available in the state in which you’re operating. Most states have an online business database for this purpose. For example, New York’s Corporation and Business Entity Database allows you to check what names are already on record with the Secretary of State.
Internal buy-in is also crucial. Other stakeholders in your business should be consulted before making a business name change. In some cases, it’s required. For example, in a limited liability company (LLC), you usually must propose the change to all other LLC members per your LLC operating agreement guidelines. Similar rules are in place if you choose incorporation. The corporation’s board needs to approve the name change before you move forward.
Let’s assume your name is available, and you get the go-ahead from internal stakeholders. Finally, you must ensure it meets your state’s business naming guidelines. These rules vary from state to state but typically include the following:
- The business name must contain certain words to indicate the company’s structure, such as “LLC” or “Inc.”
- Your chosen business name must avoid prohibited words, such as profanity or words that imply your company is a government agency.
- The business name must be distinguishable from any other name used in the state.
These naming conventions vary, so research your state’s rules before settling on a name.
2. File your articles of amendment
Once you’ve chosen a new name for your business, your next step is to complete the Articles of Amendment, or your state’s specific equivalent, to apply for the change. This form is essentially your way of making an official request to the Secretary of State to change the information you originally provided in your Articles of Organization or Incorporation.
The specific name for this form may vary depending on your state. For instance, New York calls the document a “Certificate of Amendment,” though it’s functionally the same as an Articles of Amendment.
You typically submit the form to your Secretary of State, along with a filing fee. In many cases, you can also use your Articles of Amendment to change your official business address or name a new registered agent, though some states have other forms for these purposes.
3. Notify the IRS
The Internal Revenue Service (IRS) uses your company’s official name as an identifier when you submit your tax return. So when you proceed with a business name change, you also need to let them know of your company’s new name.
You can do this in two ways:
- Write to the IRS to inform them of the name change. Be sure to write them at the same IRS address you would have mailed your tax return to (if you were to file a paper tax return)!
- Notify the IRS of your name change using your current year’s tax return.
Sole proprietorships and certain LLCs must use option #1. This is because they don’t file business tax returns. Instead, their taxes pass through to their individual returns. However, corporations and partnerships can use their current year tax return, either Form 1120, Form 1120-S, or Form 1065, to denote a name change.
Don’t want to go down either of these routes? You can also notify the IRS directly. However, this notification must carry the signature of a corporate officer or one of the company’s partners.
A note about EINs
You may need to apply for a new Employer Identification Number (EIN) when you change your company’s name. However, this is usually only the case if your name change comes with a business entity change. For example, if you also switched from an LLC to a C Corporation. In this situation, you need a new EIN because your company’s structure changes.
In some situations, when you apply for a new EIN and close the old EIN, you may need to file a final tax return for the old company. If you need to apply for a new EIN, be sure to consult a tax professional to ensure you satisfy all the requirements.
Lastly, your state’s Department of Revenue or Taxation may require you to update your business name if you make the change. For example, if you have an LLC in New York and you change the business name, you will need to update the LLC’s Department of Taxation account.
4. Update business documents
Your new business name will be official once you complete your Articles of Amendment and notify the IRS. After that, it’s on you to make sure to carry over the change across your materials and accounts. Be meticulous – you’ll generally want to change any mentions of the name you’ve previously used on things associated with your business.
The following are just some of the documents or materials that may require your attention:
- Business bank accounts you opened using the company’s previous name
- Marketing materials and channels, from websites and social media to physical marketing, such as signage
- Legal permits related to your company, such as any business licenses or permits provided by the state or your local authorities
- Contracts and legal agreements that carry the old name, such as your LLC operating agreement
If you find a valuable document that uses your company’s old name, you need to create an updated version for the new name.
An official business name change comes with a lot of paperwork, which may make it seem like too much of a hassle (or too expensive) for many small business owners. Thankfully, you have another option— a “doing business as” (DBA) name.
Also referred to as an “Assumed Name” or “Trade Name,” a DBA is a fictitious name you can use for your business while keeping its legal name the same. Many states allow you to have several DBAs. Generally, you apply for each DBA using state-specific forms. Using a DBA helps minimize changes to your business documentation. You may have less paperwork than you would if you completely changed your legal name.
A DBA is ideal for a company rebrand or if you want to operate under a new name. Getting a DBA isn’t always an alternative to an official name change such as when the change accompanies an alteration of your business entity.
Don’t forget to update your BOI report
On January 1, 2024, the Corporate Transparency Act went into effect. The Financial Crimes Enforcement Network (FinCEN) began accepting required Beneficial Ownership Information (BOI) reports. Specifically, BOI reporting is required if your company is an entity formed with a secretary of state, such as an LLC or corporation. You may also want to seek the advice of an attorney who can review your specific circumstances and guide your decisions to confirm that you are doing what’s right for you.
This report is used to name any beneficial owners inside your business. A beneficial owner is an individual who either directly or indirectly exercises substantial control over the reporting company or owns or controls at least 25% of the company’s ownership interest. Therefore, beneficial owners include people who are the legal owners of the company and those who have substantial influence over it. Failure to file a BOI report with FinCEN can result in monetary penalties and up to two years in prison.
There are potential penalties for failing to report a name change. You must update your new name on your BOI report within 30 calendar days from the official change. This includes any changes to a DBA or obtaining a new DBA.
FinCEN may pursue you for failing to meet its reporting requirements if you don’t keep up with these deadlines. Use the FinCEN website or a third-party service, such as Block Advisors Beneficial Ownership Information Reporting service, to denote the change as soon as it’s made to avoid penalties and issues.
Stay in Compliance – Update your Beneficial Ownership Information
You can change your business name by filing your Articles of Amendment with the state or filing for a DBA to serve as a fictitious name.
Filing fees vary by state. Generally, you can expect to pay between $30 to $100 to rename your company.
You can, in most cases. One of the main exceptions is if the name change comes with a business entity change. If your entity changes, you may need to file for a new EIN with the IRS.
Make sure to submit the appropriate state-specific forms after checking for name availability and notify the IRS and FinCEN of your change.
Assuming you have admin access to your Facebook page, open the business page and click the ellipses. Select “Edit Page Info,” followed by “About,” and then the “Edit” button next to the page’s name. Enter your new name, hit “Continue,” and “Request Change.”
You can change your business name with the IRS by either sending a notification of the name change to the address to which you submit your tax return or indicating the name change on the tax return itself.
This article is for informational purposes only and should not be construed as legal advice. You may want to seek the advice of an attorney to evaluate all relevant considerations.