Laws & Regulations To Know Before Changing the Name of Your Business

The decision to change the name of your business should never be taken lightly. A positive brand identity that customers associate with quality, reliability and value is a powerful thing that can take years to build, even in a small market. On the other hand, a brand identity that no longer fits your business or does not communicate your value to consumers effectively can be a detriment to reaching new customers and new markets. In such cases, the benefits of a new business name can outweigh the associated cost and disruption.

Whatever your reason for considering a name change, it is important to first understand and consider the legal and regulatory requirements that come along with such a decision. You may also want to consult a business lawyer or another expert for advice and assistance specific to your location and industry.

1. Federal Trademark Registration

Federal trademark registration generally gives the registrant an exclusive nationwide right to use a trademarked name in connection with specific goods and services. Thus, it is incredibly important to make sure your new business name has not already been trademarked by another company.

The United States Patent and Trademark Office provides online access to the Trademark Electronic Search System (TESS) to help you check your proposed name against a database of registered trademarks. You should also check the database for variations of your proposed name, as trademark protection extends to similar names that have the potential to cause confusion among consumers. Once you identify a name that has not already been registered, you have the option to register the trademark yourself if you choose.

2. State Registration Requirements

Though details can vary from state to state, most businesses must register name changes officially with a state or local regulatory body, such as the Secretary of State’s office or the office of the county clerk. If you have already registered as a corporation, a limited liability company (LLC) or a partnership in your state, you must contact the appropriate administrative authorities to amend your registration and update the name of your business.

You may also need to file separate paperwork to update your trade name, also known as your “doing business as” (DBA) name, with a state or local authority. If your business has been operating as a sole proprietorship under your real name up to this point, it is likely you do not have a DBA registration to amend. In this case, you need to file the initial paperwork to register your new name if required in your state. In most states, any business of any size operating under a fictitious name must register that name with the appropriate authorities.

3. Local Licensing and Permitting Requirements

If your business operates under any state or local licenses or permits, you must officially notify the relevant administrative body about your business’s name change. Local laws and regulations vary widely, so be sure to contact all relevant authorities to confirm you are in compliance under your new name. If you are required to post a permit or license in your place of business, you generally need to obtain new documents showing your updated name as soon as possible.

4. IRS Requirements

Most businesses need to notify the IRS about business name changes. If your business is a sole proprietorship or a single-member LLC, send a signed letter describing the name change to the same address to which you send your federal tax return. If your business is a partnership or a multi-member LLC, indicate the name change on your current-year Form 1065 tax return. If the current-year tax return has already been filed, send a notification letter signed by a partner or LLC member to the tax filing address. If your business is a corporation, indicate the name change on your current-year Form 1120 or Form 1120S tax return. If the current-year tax return has already been filed, send a notification letter signed by a corporate officer. Also notify any state or local tax or revenue agencies according to local requirements.

This article was originally published at Investopedia.