Brad Nakase, Attorney
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Ever since she was a child, Elizabeth has loved making her own jewelry. She has since graduated from making macaroni necklaces and string friendship bracelets to fine jewelry made of gold, diamonds, and beautiful gems. After showing off her jewelry at trade shows and Renaissance fairs, Elizabeth amasses enough customers to start her own business. She creates a sole proprietorship called “Elizabeth Culter Fine Jewelry.” The company is very successful and Elizabeth’s sales skyrocket. Now that she has an established clientele, Elizabeth decides that she wants to expand her design business into handbags. She has started to make custom leather purses with jeweled elements. However, as Elizabeth prepares to open a handbag store for her new products, she realizes that she can’t use the name “Elizabeth Culter Fine Jewelry.” The name is not descriptive of the new business brand. She would like to call the new store “Luxe Luggage,” using a DBA, or “doing business as name.” She believes it would be more informative for customers and less confusing. Elizabeth recognizes that in order to use this new name, she will have to file for a DBA in Los Angeles, the city in which she works. Once she gets the new name approved, she opens up her new store “Luxe Luggage” under the original brand name, “Elizabeth Culter Fine Jewelry.”
Having a name specific to one’s business is a good marketing strategy, but it is illegal to use a fake name to hide from vendors, customers, complaints, or bills. If a business owner would like to have a fictious name for his or her business in Los Angeles, he or she must file the proper paperwork according to state law. This way the public can identify the business owner as the proper owner and there is no confusion.
In Los Angeles, a fictitious business name, or DBA, is one that does not contain the owners’ surname or the official corporate name. It is possible to file for a DBA using a portal on the Los Angeles County Clerk’s website.
According to the California Franchise Tax Board, a “doing business as” (DBA) name may also be referred to as a fictitious business name (FBN) or a trade name. State rules regarding filing a DBA apply to everyone in California, whether a business owner files for one in Los Angeles or San Francisco.
If a business name includes the owner’s last name, then it is not a fictitious business name. So, if someone in Los Angeles opens a business called “Miranda Lopez’s Alterations,” they do not have to file a DBA statement in LA County. However, if Ms. Lopez wishes to call her LA business “24/7 Alterations,” then she will have to file a fictitious business name, or DBA, in Los Angeles.
If a business is a general partnership, and the business’ name does not contain all of the partners’ surnames, then the business requires an LA County DBA. So, if the business’ name is Smith & Winslow’s Repairs, but there is a third partner with the last name “Lowell,” then the company will need to register for a DBA. As for a corporation or limited liability company (LLC), these two business types must file a DBA if they use a name that is different than the official company name that was filed with the state at the time of organization or incorporation.
If a business owner has a particular DBA in mind, then he or she should grab it as soon as possible. DBAs operate under a first come first served basis. This means that is another business in Los Angeles is using the desired DBA name, the business owner cannot use it. A business also cannot use a DBA that confuses the public. For instance, a sole proprietorship cannot use “Inc.” in its name if it is not incorporated. If an owner wants to check if a certain name is available for use, then he or she can check the Los Angeles County Clerk’s website. The site offers a tool for looking up already-existing DBA names. This can save a business time; it would be a waste to submit an already-existing name for approval only to be summarily rejected.
A business can go ahead and start doing business before filing a DBA in Los Angeles. In fact, a business has up to 40 days to file for a DBA after opening. That said, the longer an owner waits to file, the more likely it is that the name will be taken. Even if one does not file immediately, it would be a good idea to conduct a search on the name to ensure its continued availability.
In order to file a DBA with Los Angeles, the Los Angeles County Clerk has an online portal through which an owner can submit a DBA statement. It is also possible to mail it or have a third party perform the registration. Filing with the Los Angeles County Clerk has a fee of $26. It is necessary to renew the registration every five years, and for the same fee. To search for a DBA name in the database, it costs $5 per name search.
Once a Los Angeles owner files a fictitious business name, he or she has 30 days to announce the statement in a local newspaper. The business must pay for it to appear once a week for four weeks in a row. In order to see which newspapers qualify, one can check with the county clerk. After the four weeks have finished, it is a good idea for a business to ask the newspaper if it will file an affidavit.
If the DBA meets county requirements, the Los Angeles County Clerk will approve the DBA application. That said, the County Clerk will not research potential legal issues for a business owner. This means that if another company sues an owner for using a particular DBA, the county’s approval cannot be used as a legal defense. So, if a company turns out to have trademarked a DBA, then an owner can’t say “But the county approved the name for me.”
A business owner may strike upon the perfect name for his or her business. However, this does not mean that they will get to use it. Business names are subject to a number of restrictions. It is possible that the proposed name is too close to an already-existing business’ name or trademark. It may also violate state law. To research this, one should check their state’s website.
To search for registered corporate names, a business owner can check their state’s Division of Corporations website. To search for trademarks, an owner can look at the U.S. Patent and Trademark Office. Registered DBAs will be listed with the state or the county government.
Depending on the state in which one operates, there will be different laws when it comes to naming a business. In California, for example, corporations, partnerships, and LLCs can only use Arabic numerals, English letters, and a few special symbols (commas, asterisks) in their name. Unless the company has incorporated, a name cannot include the abbreviation “corp.” Also, words like “municipal” and “state” cannot be used because they imply a false government association.
Sole proprietors have a little bit of leeway. Doing business under one’s own name is always legal even if there are other people doing business under the same name. For example, there can be numerous John Smith’s working as painters in Los Angeles. This does not present a legal problem. However, states differ on this. In California, a man named Howard Jacobs can open a business called “Jacobs’ Coffee Corner.” In Florida, however, Mr. Jacobs would need to file “Jacobs’ Coffee Corner” as a DBA.
All states agree, however, that an owner cannot register a corporate name that is deceptively similar to another business’ name or trademark. This means that a burger joint cannot be called “MacDonald’s.”
Picking a business name is an important step in forming as company and should be taken seriously. A name should not be hard to spell or too limiting. Let’s consider our opening example. When starting her business, Elizabeth called her company “Elizabeth Culter Fine Jewelry.” There is nothing wrong with this name, but it ended up limiting her brand when she wanted to branch into handbags.
Existing corporate names can be researched via a state’s division of corporations. When a business owner has an idea for a name, they should search it on this database to determine availability. It is essential to have a name that is not too similar to any existing one. This will prevent incorporation. If it’s a tricky case and a business owner isn’t sure if there is too much similarity, he or she should consider consulting a business lawyer or contacting the state.
That said, a business owner does not have to worry about business names in other states. If a business owner in California opens up a shop called “Louis’ Subs,” it will not matter that there is already a “Louis’ Subs” in New York. One only needs to worry about businesses in one’s own state.
But, according to the Small Business Administration, DBAs are different. While there is no legal reason preventing a business owner from using a DBA that someone has already registered, there is a downside. If someone is using the same DBA as another company, their brand may suffer. Two “Kat’s Ice Cream” parlors in Azusa is only going to confuse customers and harm business.
It may also be a good idea to research available domain names and trademarks online. If a business owner selects a name that is too similar to an existing trademarked name, then he or she could face a trademark infringement lawsuit. A unique domain name is important for a company, so it is wise to check that the corresponding domain name is available for use. To check patents, one can look through the database available through the United States Patent and Trademark Office.
A business’ name plays a role in the company standing out from the competition. Another business taking that name affects one’s ability to stand out or have name recognition. A business can, however, take steps to protect its “doing business as,” or DBA, name.
If a business is a sole proprietorship or partnership, then the owner can use his or her own name without needing to file any paperwork with the county or state. This means that it is legal for Kathy Jones to run a business called “Kathy’s Cookie Shop.” Unfortunately for Kathy, every other person named Kathy can do the same, even ones in the same town. Let’s say out Kathy works in Los Angeles. Another Kathy in Los Angeles decides to open a “Kathy’s Cookie Shop.” This is legal. If Kathy Jones wishes to prevent Other Kathy from doing business under this name, then she will need to sue her, arguing that the name is confusing customers and affecting business.
If a company chooses to do business under an assumed name, or a DBA, then the owner will have to register the name at the local level. Let’s say Kathy decided instead to call her baking company “Cookies Galore.” This name is a DBA and must be filed locally. Once a business owner registers his or her name, nobody in the local area can use that name. This offers a business brand protection. In Kathy’s case, she would be the only “Cookies Galore” in Los Angeles, which may result in more brand recognition and more customers. If someone else starts using the protected name, the business owner should contact the city or county office where they registered the name. It is possible that the other business hasn’t registered their DBA, in which case it is breaking the laws. For example, maybe Kathy notices that a company in Santa Monica is using the name “Cookies Galore.” She knows that her DBA name is protected because she registered it with the county, so she contacts county officials. It turns out that the Santa Monica “Cookies Galore” is illegally doing business because they have not filed the DBA name (which would be rejected because Kathy already uses it).
Trademarking a DBA business name offers even more protection than just registering it. Anyone who infringes on the trademarked name can be sued. Even if a name is too similar to a trademarked name, there can be legal problems. That said, a business owner cannot trademark his or her personal name. Also, he or she cannot trademark a generic name. This means that Rory Owens cannot trademark his name. Similarly, he cannot trademark his business “L.A. Extermination,” because the name is generic. However, if Rory’s business was called “The Pied Piper Rat Killer,” the name would be distinctive enough to be trademarked. In order to use a trademark to protect a name, the name should be very unique or unusual.
Another step a business owner can take to protect his or her company’s name is to register an Internet domain name. Even if the company does not have a website yet, it is possible to reserve a domain name for later use. If a business owner has trademarked his or her business name, then it may be possible to force another company to give up a domain name that infringes on their trademark. Let’s say Rory Owens has trademarked “The Pied Piper Rat Killer,” but before he can set up his website name, he notices that another business is using the domain name “piedpiper.com,” which Rory wanted to use. Rory is able to use his trademark status to force the other business to forfeit its domain name.
It should be noted that simply having a domain name does not give a business any trademark rights.
A DBA is a fictitious name that a corporation uses when it wishes to have a name separate from the one it registered at the time of incorporation. Most states require DBAs to be registered, but some states do not.
If a corporation operates in a state that requires DBAs to be filed, then a corporation that wants to do business under a name different than that which appears on its certificate of incorporation must file the DBA with the state. Let’s say that there is a corporation called “Hot Shot Corp.” that sells athletic equipment. Perhaps the owners decide to branch into clothing, and they would like to use the name “Hot Shot Athleisure” without having to incorporate a second separate business. The corporation would have to file the DBA with the state in order to use it.
States have different requirements when it comes to where to register the DBA. Often, states will require that the DBA be filed through the Secretary of State’s office. Others, however, may require that a business file its DBA with the county clerk, perhaps in addition to filing with the Secretary of State.
Before filing a DBA, a business owner should check the state’s business directory to ensure that the desired name has not already been taken. Forms will also differ by state. Some allow for business owners to file online, while other forms must be filled out by hand and submitted in person or by fax. These forms will generally include the corporation’s name, the desired DBA, and the signature of an agent authorized to act on behalf of the corporation. There is also a registration fee.
By registering a DBA name, a corporation can let others know that the name is in use. Even though registration does not protect a name, it strengthens one’s claim to its exclusive use. If a dispute arises with another business owner over the name, then one can point to a registration to indicate they have been using it for a longer period of time.
