What is a Fictitious Business Name?
When you conduct business in California under any name other than your name or the exact name of your California corporation or California LLC, you are operating under a “fictitious business name.” For example, if you incorporated as “ABC Smartphone Store, Inc.,” but the sign on your store says “Smartphones-R-Us,” then “Smartphones-R-Us” is your fictitious business name. This is commonly known as “doing business as” or “D/B/A” or simply “DBA.” Leaving off the “Inc.” on your sign will also mean that you are DBA.
If you are using a DBA in California, you must register your fictitious business name with the county clerk and publish a Fictitious Business Name Statement in a local newspaper. Use and registration of fictitious business names is governed by California Business & Professions Code §§ 17900 et seq. The statute is intended to protect the public by making publicly available the names of people who are running businesses under a fictitious business name.
What do I Have to do?
California Business & Professions Code § 17910 states:
“Every person who regularly transacts business in this state for profit under a fictitious business name shall do all of the following:
(a) File a fictitious business name statement in accordance with this chapter not later than 40 days from the time the registrant commences to transact such business;
(b) File a new statement after any change in the facts…; and
(c) File a new statement when re-filing a fictitious business name statement.”
In practice, you must go to your county clerk’s office or website, find and file the Fictitious Business Name Statement. In San Diego County, for example, the Statement is “Form CC230” which can be found here. The Affidavit of Identity — required as of May 30, 2017 — is now part of the form. An information sheet can be found here. Generally, the website for the San Diego County Clerk, Recorder’s and Assessor’s office can be found here.
Once your Statement is filed, you must have it published in a local newspaper. San Diego County provides a list of newspapers here.
Once the Statement is published, you must go back to the County Clerk and file an affidavit showing the publication and where it was published within 30 days after the completion of the publication. California Business & Professions Code § 17917 (d).
Under California Business & Professions Code §17910.5, your fictitious business name cannot contain the words “Corporation,” “Corp.,” Incorporated,” or “Inc.,” “Limited Liability Company,” or “LLC” or “LC” unless you have a corporation or an LLC properly organized under California law or pursuant to the laws of some other state. You can use the word “Company” as long as that use does not imply that the person is a limited liability company.
What are the Penalties for Not Registering?
The penalty for not filing a Fictitious Business Name Statement is that you cannot file a lawsuit on “account of any contract made, or transaction had …” until you comply with all the filing requirements. California Business & Professions Code § 17918. For example, if you are operating as a DBA and you pay a vendor $10,000 for supplies, but the vendor never delivers the supplies, you cannot sue the vendor for breach of contract until you comply with the fictitious name statute.
Call San Diego Corporate Law Today
Registering your DBA is more complicated than it seems. While you are busy running your business, let a skilled business attorney help. At the same time, a corporate lawyer like Michael J. Leonard, Esq., of San Diego Corporate Law, can offer advice on whether now is the time to form a California corporation or a California LLC and, thereby, potentially avoid DBA registration requirements. If you need or just want more information on registering your DBA or about forming a corporation and/or an LLC, contact Mr. Leonard today. He can be reached by email or by calling (858) 483-9200.