The term “fictitious business name” can make a company sound like a front for the mafia, but is in fact a legitimate form of business registration that is quite common in many regions. The registration of a fictitious business name allows an owner, partnership, or corporation to do business under a name separate from their established legal names. Different regions have varying regulations as to the use and management of fictitious business names; a county clerk can be a good source of information as to where to find necessary forms and what regulations apply.
The simplest form of a fictitious business name occurs when a person wants to open a business that does not have his or her name in the title. If Joan Applewood wanted to open a bakery called “Shortcake,” she might have to register “Shortcake” as a fictitious business name. The registration creates a record that connects the legally responsible party to the name of the business by saying that Joan is doing business as Shortcake, thereby making it easy to trace ownership. In different countries, the laws requiring fictitious registration may be referred to as “doing business as,” “trading as,” or “operating as” laws.
Where the establishment of a fictitious businesses becomes tricky is if a person wants to include part of his or her name in the title of the business. Generally, if a person uses his or her full name in the title, such as “John Doe's Tire Shop,” it will not necessitate the creation of a fictitious business. But if the owner wants to call the business “John's Tires,” or “JD's Tire Shop,” he may be required to register in certain regions. Many jurisdictions will waive registration if the owner's surname is in the title, but not if only his or her first name is used.
A fictitious business name may become necessary for companies that have co-owners, but do not wish to list all of their names in the title. Names such as “Jones and Associates,” “Donovan Group,” and “Brown and Sons,” imply that there is more than one owner, and may or may not require registration. State and regional laws may have very different interpretations of this issue; which makes it very important to study applicable laws carefully.
In some regions, filing for a fictitious business name is done simply through submitting a form and fee to the relevant authorities. In some regions, supporting material that shows that the owner listed is the legal owner of the proposed company is also required. California business law also carries an unusual requirement that the owner post the notice of the business name in local newspapers for several weeks.