A fictitious business name, or FBN, is a legal term for a form of registration required of businesses in certain situations. When determining if you need to file a fictitious business statement ask yourself whether you plan on running the business under an assumed name. If so, then they will need to follow state fictitious business statement laws.
Do I Need an FBN?
A common example of when you would need to register an FBN is if your name is Bob Jones and your business is called “Exceptional Cookies”. In this case, you would need “Exceptional Cookies” to be filed as an FBN, since it has no easy connection to the owner’s legal name.
Technically, an FBN is a business name that does not include the surname of the individual owner and each of the partners, or the nature of the business is not clearly evident by the name. For example, doing business under a name like “Halley & Gomez Associates” or “Halley & Gomez Sons” would require an FBN to be registered.
Even though the surnames are included, it is implied that there are more business partners who have not been named. Therefore, the name is not sufficient to avoid FBN requirements. However, a business name like “Lois Foster Landscaping” would not require an FBN to be registered. The owner Lois Foster is conducting business under her own name.
In the case of a corporation, a Fictitious Business Name is any name other than the exact corporate name as stated in the articles of incorporation.
Variations In Names
Things can get a bit more complicated though when you do not have your entire name in the business name. For example, what about Foster Landscaping, or LF Landscaping?
These trickier situations all depend upon the law of the state in which you are operating your business. In California, fictitious business statements are governed by Business and Professions Code Section 17900-17930. This states that in the case of an individual, a name that does not include the surname of the individual or a name that suggests the existence of additional owners requires filing a fictitious business statement.
Foster Landscaping would not require a fictitious business statement because the business name contains Lois Foster’s surname. However, most states demand a person’s full name to avoid registering an FBN. The name LF Landscaping would need to be registered as an FBN, because initials are not enough.
These laws may seem a bit convoluted, but to understand how they work you must consider the reason behind them. Having an FBN registered allows for the owner of a company in case there is a problem. It also allows the business owner to enforce contracts that weren’t signed with her name but under the name of her business.
Starting a new business can be an exciting and confusing time with all the laws and regulations that go with it. We can help you get your company established and prepare you for success. Contact us at 714.456.9118 or send us an email at firstname.lastname@example.org to begin the process.
Courtesy of Cuselleration