Fictitious Business Names: Do You Need One?

Question:

How different can a business name be from my own name before I have to take the step of filing a fictitious business name (also know as a "DBA" or "Doing Business As"). For example, suppose my name was Gabriel Saunders. I want to use "G Saunders Group" or "G Saunders Consulting" as the name of my business. It will be run as a sole proprietorship. Do I have to go through the trouble of filing a fictitious business name?

Answer:

If you are asking a question like this, then you have most likely already figured out that a business that does not take the legal name of its owner (otherwise known as a business with a fictitious business name, or a DBA name) must normally register the name of the business with the state government. However, many states differ on what is considered a person's "legal name."

Let's take the example that was set out in the question. If you decided to open "G Saunders Consulting" in California, filing the name as a fictitious business name would be unnecessary. Under California laws, there is no need for a business owner to register a DBA or a fictitious business name so long as the business' name includes your last name. This is because, under California law, a business name is not a fictitious name if it includes your last name. There is no requirement that a business name include the owner's first name for the business name not to be a DBA.

However, if you decide to open your business as "G Saunders Group" in California, then you may need to file a fictitious business name with the state government. This is because the business name, specifically the word "Group," implies that you have co-workers that work with you. If your business name suggests that you co-own the company (names such as "G Saunders Group," "Saunders and Sons," or "Saunders and Associates"), then you do have to file a fictitious business name.

Why, you may ask, are the rules regarding fictitious business names so strange and strict? It is really because the government wants a quick way to find out who owns a business in case there are legal problems. If your business does not take your name, then consumers who have complaints about your company may have a hard time locating you if you have not registered a fictitious business name.

Registering a fictitious business name is not only about helping consumers sue you, however. For example, if your business operates under a non-registered fictitious business name, then you, as the owner, will not be able to sign any contracts or make any enforceable agreements on behalf of your business. So, if you are planning on operating your business under a DBA name, be sure to register it.