Certificate of Assumed Name
After you’ve decided what type of business entity is right for your business, you may have to decide on a business name. In this sub-series of posts, we’ll discuss:
- Certificate of Assumed Name
- Naming the Business Entity – Naming a Corporation, Limited Partnership, Limited Liability Partnership or Limited Liability Company
- Determining Whether a Name is Distinguishable
When Filing is Required
An individual or partnership that conducts or transacts business in Minnesota under a name that is different from the full, true name of each business owner must register the name of the business by filing a certificate of assumed name with the Secretary of State. A corporation, limited partnership, limited liability partnership or limited liability company that conducts business under a name that is different from the exact, legal name likewise must file a certificate of assumed name for the business name. An assumed name filing is also required when a general or limited partnership that is not also a limited liability partnership (or its partners) wishes to file statements of partnership authority, statement of denial, statements of merger, statements of dissociation, statements of dissolution or amendments or cancellations of those statements. (Note that such a partnership is not “assuming” a business name by making these filings; instead, the reason for making the certificate of assumed name filing is that the Secretary of State’s Office requires it to be filed before any such statements may be filed.) For example, if John Smith, a sole proprietor, does business under “Smith’s Realty,” he must file a certificate of assumed name. Filing is not required, however, if John Smith, a sole proprietor, does business as “John Smith Realty.” Likewise, if Able Building Company, a corporation, does business as “ABC Construction,” it must register the assumed name “ABC Construction.” If, however, Able Building Company does business under the name Able Building Company, it is not required to file a certificate of assumed name.
Restrictions on Assumed Names
An assumed name may include a designation required to be in the name of a business entity only if the business owner using the assumed name is that type of entity. For example, ABC Incorporated, a corporation, may file the assumed name XYZ Limited, because Limited is a corporate designation and the business owner is a corporation. If, however, John Smith is an individual in the realty business, the assumed name cannot be registered as “Smith Realty, Inc.” Also, assumed names may not include in their names a geographic reference to a place or community if the business is not located in that community. Finally, financial institutions wishing to use an assumed name must first receive approval from the commissioner of the Department of Commerce.
Reason for Filing
The reason for filing a certificate of assumed name is to provide information to the consumer on the identity of the business owner. Registration of the assumed name does not protect the name against use by other persons. It is up to the individual to decide whether to take legal action to prevent use of the name. An attorney can provide advice on the likelihood of success and potential costs of such a lawsuit. Note also that registering a domain name or Federal trademark is a process completely separate from making any filing with the Secretary of State’s office. Determining Whether an Assumed Name is Available An assumed name will not be accepted for filing if it is the same as, or is not distinguishable from, the name of a corporation, limited liability company, limited partnership, limited liability partnership or state trademark on file with the Secretary of State. (See the section titled “Determining Whether A Name is Distinguishable” later in this chapter.) Business owners may call the general information line of the Secretary of State’s office (651) 296-2803, or access the Secretary of State’s’ website, www.sos.state.mn.us, prior to registration to determine whether a name is available. The Secretary of State’s office will perform a preliminary check but does not guarantee that the name will be available at the time of filing. There is no procedure for reserving an assumed name. A sole proprietorship or partnership that intends toincorporate at a later date may, however, reserve the corporate name by filing a reservation of corporate name with the Secretary of State. This procedure is described in the section of this Guide on forming a corporation. 2009 legislation provides that upon the dissolution or termination of a business entity for failure to file an annual renewal, the Secretary of State shall automatically file a name reservation to hold the name of the dissolved or terminated entity for a period of one year from the date of dissolution or termination. The intent of this legislation is to prevent a party from “name squatting” on the name of a business that has forgotten to file its yearly renewal and then demanding payment from the business to get the name back.
A simple, one-page certificate of assumed name form can be downloaded from the Secretary of State’s website at www.sos.state.mn.us/index.aspx?page=331, and is also available by fax from the Fax Forms Library at (651) 296-2803, and by mail from that office. The business owner completes and signs the form and files it with the Secretary of State, along with a filing fee. The Secretary of State’s office then processes the form. After the Secretary of State notifies the business owner that the filing is accepted, the business owner must have the certificate published for two consecutive issues in a newspaper qualified to print legal notices (sometimes called a “legal newspaper”) in the county where the registered office or principal place of business is located. A qualified newspaper is one which meets the statutory standards established by Minnesota Statutes Chapter 331A. The cost of publishing this notice is set by the newspaper and paid for by the person or entity making the assumed name filing. The Secretary of State’s office maintains a list of “legal newspapers.” Failure to publish the notice renders the assumed name filing invalid. A business that fails to file its assumed name as required by law will be assessed $250 in costs at the time of any subsequent lawsuit by or against the business.
Duration of Filing Period; Filing Amendments
A certificate of assumed name is valid for ten years from the date of filing, unless there are changes in the information provided on the certificate. The Secretary of State’s office mails the business a renewal form six months prior to expiration of the certificate. For this reason, it is important to file an amendment to the assumed name certificate each time the address information on the certificate becomes outdated. If other information provided on the certificate of assumed name changes, the business must also file an amendment with the Secretary of State’s office. Any amendments must be filed within sixty days after the change takes place. See the Secretary of State fee schedule later in this Guide for filing fees.
This post is part of a series of posts on how to choose a business entity type.