Does Your Business Need an Assumed Name
Many businesses conduct business under more than one name. However, if your form of business is a corporation, limited liability company, partnership or sole proprietorship, you must register the DAB with the proper authorities. There is nothing wrong with using an assumed name in your business as long as the laws regarding assumed or fictitious names are followed.What is an Assumed Business Name?
An assumed or fictitious name any name used to identify your business other than using the full legal name of our business. An assumed name is usually the name a business holds itself out to the world, but it is not the actual legal name of the person or entity that owns the business. This allows a business to develop a brand name or trade name for marketing purposes. There is nothing fraudulent or illegal about this, as long as the legal requirements for an assumed name are followed.
In fact, this is a very easy way for a business to operate under multiple names. An assumed name can be set up for each business unit. For example, the business “ABC Enterprises Inc” can operate separate divisions (“XYZ Widgets” and “MNO Auto Parts”) under different names and still have only one tax return to file. The correct use of the assumed name would be:
ABC Enterprises, Inc., an Illinois corporation, d/b/a XYZ Widgets
The Illinois Assumed Business Name Act requires a business to use an assumed name in a business as long as the full legal name of the business (corporation or LLC) is also shown in the name. (805 ILCS 5/4.15) The purpose of this law is to prevent fraud on consumers or other businesses.
Under Illinois law you are required to use the full legal name of the business unless you have registered an assumed name or have registered the tradename, trademark, service name or service mark with the federal registry or the Illinois Secretary of State. This is relatively easy to accomplish.Can a Corporation Have an Assumed Name or a DBA?
The simple answer is yes, as long as the assumed name is properly registered. In Illinois this is accomplished by filing with the Illinois Secretary of State by completing the necessary application and paying the fee. (See: http://www.cyberdriveillinois.com/departments/business_services/assumed_name_adoptions/corpinstructions.html). For corporations this may also require filing Articles of Amendment to the Articles of Incorporation adopting the assumed name. This is not difficult, but needs to be done correctly.Can an Individual use an Assumed Name?
Yes. If you operate your own business as a sole proprietorship or as a partnership, you can and should register that name with the County Clerk’s Office as an Assumed Name. In Cook County, this can be done online thru the Cook County Clerk’s online registration page. There is a $50 fee for the registration. This will identify the entire world about who is the real owner of the business and allows sole proprietorships and partnerships to conceal the names of the actual owners. However, sole proprietorships and partnerships are not the recommended ways to own and operate a business due to the exposure of personal liability, which is why we recommend that businesses either set up a corporation or an Limited Liability Company (LLC). Visit our incorporation webpage for more information.Trademarks and Servicemarks
One of the most important assets of a business – and one of the most least understood – is the importance of protecting the Intellectual Property (IP) of the business. This includes a trademark, tradename, service mark or service name. These are important assets and require special attention and protection which is more fully discussed elsewhere on our website.Contract Experienced Business Lawyers
Every business should have experience and reputable counselors to protect the assets of the business. The experienced Chicago business lawyers at Bellas & Wachowski are available to discuss and assist in protecting your interests. Contact us for more information or an appointment.