When Does a Corporation Need to File a Fictitious Business Name?

When we help our clients incorporate their businesses, one of the things we know from having done hundreds and hundreds of these things, is that the work that the small business lawyer does for the client doesn’t stop when we hand over the corporate book and say, “Here’s your brand new corporation.” That’s really just sort of the beginning of things. Frequently, once we’ve incorporated a business, our clients will get correspondents from the federal government, from the internal revenue service, from the State of California, frequently from scams. And they just don’t really know what to do with the paperwork. So we offer a service to our clients and it runs like this. We call it “I’ve just got a quick question”. Once you’ve incorporated your business with us, what we will do is make ourselves available over the course of the next year to answer any questions that you might have about your corporation. An example of a quick question would be one that I received this morning. We’ve got a client that’s just formed his corporation. We formed the corporation and gave it a name that was similar to the business that he wanted to run. Things have been going well for him, and he’s developed through the process of getting his one main business going. A kind of a sideline activity, which is sort of a specialized niche of his main business. And what he wanted to do was develop that second business and have it appear to the general public as though it might be a business completely separate from his corporation. So his question was really how could he do that? Will he need to setup a second corporation to run the business? And the answer is no you don’t necessarily have to do that. The way he that he could handle that situation, and really pretty smart thing to do for a small business owner, is actually use a fictitious business name. And the way you would do it would be this: is that you could go down to the county where the business is being conducted, and you can file an application with the county recorder. You would tell the county recorder, “Hey, my corporation wants to do business not in the original corporate name, but in a second name.” And the county recorder for a small amount of money will allow you to file that application, and give you that name to use in the county for your business, so long as some other business does not already have that name. The process is filing an application, and then what you will do is you will publish the application, or you will publish the name in a newspaper of general circulation over the course of a number of weeks. And once you’ve gone through the application filing stage, one you’ve gone through the publication stage, then your corporation can use that name to do business. So you could do business as ABC Incorporated or you could do business as the Happy Balloon Company, and you could actually hold yourself out to the public under the names of both of those businesses. Then what you can do is if you’re actually generating cash under the new fictitious name, you can go down to the bank, you can open a banking account using your fictitious business name paperwork along with your other corporate paperwork. And that way you can essentially run two companies. If the fictitious business name company actually takes off, then it’s a very good time for you to consider as a small business owner, whether or not we should actually split our two companies. That way we would have the original corporation, and then we would have a second company also a corporation now using the name that we selected with the fictitious business name statement. So hopefully that kind of explains the process just a little bit more. And if you’ve got a question about how best to use a fictitious business name when it comes to small business corporations, my name is Andy Gale. I’m a small business attorney. I’ll be more than happy to answer any questions that you might have.