Updates to North Carolina's Assumed Business Name Law—Are You Ready?

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First, what is an Assumed Business Name?

An assumed business name, often referred to as a "fictitious name," "DBA," or "doing business as" name, is a name that a business uses other than its legal name. DBAs differ by entity type. For a limited liability company ("LLC") or a corporation, a DBA is any name other than the official name the LLC or corporation has registered with the North Carolina Secretary of State. A DBA may be a variation of the company's registered name or entirely different from the company's registered name. For example, a food truck owner may register an LLC, "Sonny's on Wheels, LLC," with the Secretary of State. However, the food truck owner may decide to use a DBA, such as "Sonny's Snow Cones," as the name of the food truck.

For a sole proprietorship, a DBA is any name other than the proprietor’s real name. For example, if Larry Smith runs a woodworking business as a sole proprietor, he could register a DBA name such as "L.S. Fine Woodworking" with the North Carolina Secretary of State and use that name in his marketing materials and website, rather than his individual name. For a general partnership, a DBA is any name other than the names of the partners. To extend the example above, if Larry Smith and David Wentworth own and run a woodworking business as a general partnership, they could register a DBA such as "Smith & Wentworth's Fine Woodworking."

Changes to North Carolina's Assumed Business Name Law

In 2017, North Carolina passed the Assumed Business Name Act and created a new, statewide searchable public database of assumed business names. All DBAs filed on or after December 1, 2017, automatically become part of the database. However, DBAs filed before December 1, 2017, are not part of the database and will expire on December 1, 2022.

If you filed your Assumed Business Name Certificate after December 1, 2017, or if you initially filed prior to December 1, 2017, but have re-filed a certificate since then, you do not need to take any action.

If I filed for my assumed business name before December 1, 2017, what do I need to do?

Unless you have re-filed or filed for the first time since December 1, 2017, your DBA will expire on December 1, 2022. You must file a new Assumed Business Name Certificate on or before this expiration date in order to continue doing business using your DBA.

The Assumed Business Name Certificate must include all of the following: (1) the assumed business name; (2) the real name of the company or person engaging in business under the assumed business name; (3) the nature of the business; (4) the street address of the principal place of business; and (5) each county where the company or person uses or will be using the assumed business name to engage in business.

You will file the Assumed Business Name Certificate with the Register of Deeds in the county where your business operates. On your certificate filing, you now have the ability to select all North Carolina counties in which you do business, rather than having to file a certificate individually in each county. Under one certificate for the same business, you will also be able to file for up to five assumed names, which may benefit a single business that offers different products or services. For example, in addition to "L.S. Fine Woodworking," Larry Smith could also register the assumed business name, "L.S. Design Consulting" if he wished to distinguish the different services he offers in his sole proprietorship by using different business names.

Failing to file an Assumed Business Name Certificate results in potential liability to any person who is injured by the business owner's failure to file. They may be eligible to seek damages for reasonable expenses, including attorneys' fees, that they incur in ascertaining the information required to be stated in the assumed business certificate for a reasonable purpose.

Other Considerations for Business Names

Keep in mind that the law governing assumed business names is separate from the law governing whether your company may use a name as a trademark. Thus, even if your certificate filing for an assumed business name is accepted by the North Carolina Secretary of State, this does not necessarily mean that the name you selected is available for use without the risk of trademark infringement. To protect the name of your business, you may also want to consider searching the trademark records of the North Carolina Secretary of State and U.S. Patent and Trademark Office to ensure the assumed business name you select does not create a likelihood of confusion with a preexisting trademark.  

Once you conduct due diligence to determine whether the assumed business name is available for use, you may decide you want to protect the name as a trademark. The trademark registration process is different than filing the assumed name certificate with the North Carolina Secretary of State. Ward and Smith's attorneys experienced in trademark law can assist with trademark selection and registration. 

*Please note the business names provided in this article are hypothetical and for exemplary purposes only.  Ward and Smith, P.A. is not providing any legal advice on the availability of these names.

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© 2022 Ward and Smith, P.A. For further information regarding the issues described above, please contact J. Michael Fields, Olivia G. Lewis or Erica B. E. Rogers.

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.

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