Your small business is your baby and choosing the right name for it is a big deal. But what happens when you need to change your business name for whatever reason?
Here’s how to prepare and what to expect when you decide your business name needs an upgrade.
Can you change the name of an existing business?
Yes, you can! Changing the name of your business isn’t always easy, but in some cases, it’s necessary. Here are a few good reasons why you might want to change your business name:
- Rebranding – Whether you purchased a business from someone else or your business has naturally evolved beyond its original title, sometimes a name change is necessary to keep up with your business identity and brand goals. In this case, a DBA may be a good option for you (we’ll discuss this more in-depth below).
- Upscaling – Are you a sole proprietor considering converting to an official corporation or LLC? If so, a name change might be in order. Depending on your circumstances, it could be as simple as adding “LLC” to your existing business title, or you could opt for a totally new name.
- Trademark violation – Uh oh. There are countless businesses out there, and sometimes it can be tough to find a name that isn’t already trademarked. If you unwittingly choose the same business name as someone else, you might have to make some adjustments.
- Just because – You don’t always need a complicated reason for wanting to change your business’s name. Maybe you’ve thought of something cleverer or received feedback from customers saying your business name is too confusing, generic, or even too hard to spell. Whatever the case, you’ve decided it’s time for a change.
Can you change the name of a business and keep the same EIN?
According to the IRS, changing the name of your business does not automatically mean you will need a new employer identification number (EIN). However, a new EIN may be required if you are changing your business’s ownership or legal structure — perhaps you are adding or removing business owners or incorporating your sole proprietorship, for example.
For more information about when you might need to obtain a new EIN for your business, check out the IRS guidelines.
How much does it cost to rename your business?
Changing your business name inevitably comes with some hidden costs.
While we can’t tell you exactly how much money you can expect to spend when updating your business name, here are some things to think about and budget for:
- Fees for filing name change paperwork with your state and local government
- Hiring experts to assist with updates to any contracts, permits, or other legal documents
- Checking availability for any trademarks, domain names, etc.
- Costs for redesigning any marketing, promotional, or other business materials such as business cards, signs, website, and more
Can I change my business name even if I only operate as a sole proprietor or general partnership?
If you don’t have a formal business entity, you and your business are one and the same. But while your business might not be a separate legal entity, you aren’t limited to conducting business solely under your personal name.
Instead, you can register a fictitious business name, also known as a trade name or DBA (doing business as). Filing a DBA with your state allows you to operate your business under a different name without “officially” changing it. This is often a good option if you want to give your business a unique name, but you’re not quite ready to register as a corporation or LLC just yet.
Getting a DBA usually requires much less paperwork and fees than changing your legal business name. To file for a DBA, you’ll usually need to fill out a form through your local, state, or county agency and pay a filing fee (though the exact process depends on what state you conduct business in).
Can I file for a DBA if I own a limited liability company or corporation?
Yes, you can file for a DBA when operating as an LLC or corporation. Getting a DBA in this instance would allow you to conduct business under a different name than what is listed on your legal business paperwork.
What is the process for changing the legal name of a business?
When you decide to change the legal name of your business, there are three main hurdles you need to tackle before you do anything else.
1. Research your new business name.
Make sure you research your new business name to prevent trademark violations or other legal complications. You can do this by searching the U.S. Patent and Trademark Office database to ensure your desired business name isn’t already trademarked. Don’t forget to check your state’s database as well!
2. Notify your state and local government.
Once you have chosen your new business name, you’ll need to let your Secretary of State know about the change. Every state has its own form you will need to fill out, and you’ll likely be charged a fee. You should also contact any local government agencies and update any business licenses and permits you may have.
3. Notify the IRS.
Lastly, you need to notify the IRS about your business name change for federal tax purposes. The process for notification varies depending on your type of business:
- Sole proprietorships and single-member LLCs: Send a written notification signed by the business owner (or an authorized representative) to the IRS informing them of the name change. Use the same address where you would mail your tax return.
- Partnerships and multi-member LLCs: If you haven’t filed your tax return yet, you can notify the IRS of a partnership name change when you file using Form 1065 (Page 1, Line G, Box 3). If you’ve already filed your current year return, write to the IRS at the address where you would mail your return, and include a notification signed by a partner.
- S corps and C corps: If you haven’t filed your tax return yet, you can notify the IRS of your corporation’s name change when you file using Form 1120-S or 1120. If you’ve already filed your return for the current year, write to the IRS at the address where you would mail your return and include a notification signed by a corporate officer.
Finally: Notify everyone else
After your new company name has been approved and you’ve notified your state and the IRS, it’s time to notify everyone else about the change. This includes (but isn’t limited to) banks, creditors, vendors, suppliers, employees, and customers.
Remember to update any outdated branding and marketing materials you may have, such as stationery, signage, business cards, social media accounts, or your company website. You don’t want any discrepancies regarding your business name!