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#203 Fictitious business names

mp3 #203 Ficticious Business Name Statements (mp3 file)


This message will discuss the following questions:

1- What is a fictitious business name?

2- Who must file a fictitious business name statement?

3- How do you file a fictitious business name statement?

4- For how long is your fictitious business name statement valid?

5- How do you abandon or withdraw from your fictitious business name statement?

6- Why are fictitious business name statements required?

First, what is a fictitious business name? A fictitious business name is any name, under which a business is conducted, that does not identify who owns the business.

For example, if an individual owns a business which is called "Joe's Meat Market" this is a fictitious business name, because the name does not clearly identify who owns the meat market. However, if an individual owns a business which is called, "Joe Mulligan’s Meat Market," or even "Mulligan’s Meat Market," it is not considered a fictitious business name, as long as the individual's last name or family name is included in the business name. On the other hand, if Joe Mulligan calls his business the "Los Angeles Meat Market," or the "Tender Meat Market," these are considered fictitious business names.

Suppose a business is a partnership, instead of being owned by an individual? In a partnership, if the last name of each general partner is included in the business name, then it is not considered to be a fictitious business name. But if the name suggests the existence of additional owners, or if there are additional owners whose last names are not included in the business name, then it is considered a fictitious business name. For example, a law firm named "Smith, Brown, And Jones," owned by those three general partners, is not a fictitious business name. However, a law firm with only one of the partners' names, or a name such as the "San Francisco Legal Clinic," is a fictitious business name.

Suppose a business is owned by a corporation, instead of being owned by an individual or by a partnership? If the business name used by a corporation is the same name as the corporation's name, then it is not a fictitious business name. However, if the name of the business is different from the name of the corporation that owns the business, then it is a fictitious business name. For example, if a business is called· "United State Imports, Inc.," and it is owned by a corporation with the same name, "United States Imports, Inc.," then it is not a fictitious business name. However, if a corporation called, "United States Imports, Inc." owns a business called "Imports Unlimited," then it is a fictitious business name. You must give a copy of the articles of incorporation, stamped by the Secretary of State, to the county clerk's office

Who must file a fictitious business statement?

Any individual, partnership, or corporation, using a fictitious business name, must file what is called a "fictitious business name statement."

You do not have to file a fictitious business name statement, however, if you represent a nonprofit corporation or association, such as a church, a labor union, a fraternal or charitable organization, a nonprofit hospital, or certain real estate investment trusts which have met specified requirements.

Next, how do you file a fictitious business statement? Your statement is filed with the county clerk's office, in the county in California where your principal place of business is located. If you have no place of business in California, but you do business anywhere in California, then your statement is filed with the county clerk's office in Sacramento County, where the state capitol is located.

The county clerk's office will supply you with a form to be filled out, showing your fictitious business name and address, along with the name and address of the individual, or each general partner, or the corporation, which owns the business.

You must file your fictitious business name statement with the county clerk's office, no later than 40 days after you begin transacting business in California. If you apply before you begin doing business, you must give an estimated date for starting business under the fictitious business name.

The information on your fictitious business name statement is published at your expense, in a legal advertisement in a newspaper of general circulation, in the county where you are filing your statement. The advertisement appears in the newspaper once a week for four successive weeks, and after the fourth advertisement appears, the newspaper usually files an affidavit of publication within 30 days, at the county clerk's office.

You pay a fee (usually around $30) to the county clerk's office, which includes one partner and one certified copy of your filed statement. Additional partners typically cost from $2.00 to $5.00, and additional certified copies, are about $2.00 each.

The county clerk's office is required by law to accept your fictitious business name statement, even if there is already another business with exactly the same name, although you may wish to avoid using the name of another business, and another business may sue you for using its name.

For how long is your fictitious business name statement valid? It is valid for a period of five years, from the date you filed your last statement. You must file a new fictitious business name statement before your old one expires, but you do not have to publish it in the newspaper again, if there has been no change in the information you filed in your last statement.

Your statement expires before the end of five years, however, if you change the name or address of your business, or if there is any change in the ownership of the business, your statement automatically expires 40 days after any of these changes takes place, and you must file a new statement, containing the new information. A change in an owner's home address, however, does not cause the statement to expire.

How do you abandon or withdraw your fictitious business name statement? If you stop doing business in California under your fictitious business name, you may file a statement of abandonment with the county clerk's office, publish it in the newspaper for four successive weeks, and either the newspaper or you must file a certificate of publication. Forms are available at the county clerk's office, and the fee for filing a statement of abandonment is usually around $30.

If you are a general partner who is withdrawing from the business, you may file a statement of withdrawal with the county clerk's office and publish it in the newspaper, which usually files an affidavit of publication. Forms are available at the county clerk's office, and the fee for filing a statement of withdrawal ranges from $5.00 to $17.00.

Why are fictitious business name statements required in California? These statements are public records, and anyone may go to the county clerk's office to find out who owns your business, and where to reach you. This information protects your customers and your creditors, if they need to get in touch with you as the person responsible, for a business which is being operated under a fictitious name.

As the owner of a business, you may also need copies of your fictitious business name statement, to open a bank account under that name, to establish credit with various suppliers, or to bring a lawsuit in the name of your business.

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