As a business owner changing your Limited Liability Company (LLC) name is a major step; however, sometimes it can be necessary.
The good news is, changing the name is easy and can be accomplished in a few steps, but first, let me walk you through why you would want to change your LLC name.
Why Change Your LLC Name?
There may be a variety of reasons why you, an LLC owner, would want to change your name:
- You may have just started your business with an LLC, but you are unhappy with the name.
- You are selling a specific product or service under your LLC name but are not happy about it.
- Your company is expanding to offer different products and services you feel the current name does not fit.
- You are concerned about the public image of your company.
- You have a trademark or other legal concerns with a potential lawsuit.
- Your LLC name is not unique enough for search engine optimization purposes.
- Your name was misspelled
Although there can be many reasons to change your business entity's legal name, it is important to note that you should always file an LLC name change with the Secretary of States' office, even if you are not changing anything else about your business.
How To Change Your LLC Name?
To change the name of your LLC, you must follow several steps after approving a “Resolution to Change Business Name,” a formally documented step taken by the company to change its name, after getting approval through a vote from its members. The following steps are:
Step 1: File a name change with the Secretary of State's office of your state
The Secretary of State's office is where all business entity documents must be submitted.
This includes details on how to make a Limited Liability Company name change.
To change your firm’s name, you'll need to file an updated Articles of Organization with the Secretary of State's office, which will contain the new company name.
In several states, this document is called an Article of Amendment.
Step 2: Send out a name change letter to all vendors or service providers of your business
Notifying everyone of the newly legal business name is important so that there are no billing issues in the future and legal reasons should any disputes arise after the name change.
Step 3: File for a Trade Name with the Internal Revenue Service (IRS)
You can apply for an EIN online, but keep in mind that the IRS will then provide you with an Employer Identification Number (EIN).
If your firm is a single proprietorship, you are not required to have an EIN or a Federal Tax ID number.
After you've completed all of these forms, make sure to keep copies for yourself since you'll need to send them to your lenders if you have a business loan or credit card debt.
Step 4: Inform Banks of the Legal Name Change
As I mentioned before, it is important to notify all banks and financial institutions of the new LLC name to avoid billing issues in future transactions to your business bank account or legal disputes about who owes what.
Changing the name on your business bank accounts will help you order new checks and credit cards.
Step 5: Check your new name on the internet for availability
Even though you have filed to change your LLC name with the state, there is no guarantee that someone else is not already using it on the internet.
You may want to check for this by performing an LLC search on Google or checking your business's social media profiles.
Step 6: If your LLC name has been "claimed" by someone else, you have a few options
You can contact the person and negotiate an LLC trade name or file for a Federal Trade Name (FBN) with the IRS.
You may also want to consider filing for an alternative business structure such as a corporation.
Step 7: Make sure to update your company LLC documentation and other vital documents with the new name
This means notifying your business insurance company, bank, accountant, and other service providers of the change.
Step 8: Update Your Business Cards and Marketing Materials
Although this may seem like a straightforward process, you must keep all marketing materials up to date since potential customers could still be searching for your company under the old name.
Step 9: Update the Name and Address on Your Federal Tax Returns
This is especially crucial because if you do not submit a tax return for three years in a row, your company will no longer exist as a legal entity.
Step 10: Make sure to update any government forms that require the company name
The majority of states do not allow unqualified people to work in the tax preparation industry. However, you must still get your business certified with the state board of equalization or obtain new business licenses.
Step 11: Don't forget to amend your LLC operating agreement
If you have the LLC's operating agreement, it is important to file an Amendment to Operating Agreement with your state.
Like with the Articles of Amendment, this form will also need to be filed with the Secretary of State's office and include a list of all members and their signatures.
As a business owner, these steps can be a bit too much.
However, another alternative to consider is filing for a fictitious name, also known as DBA.
Alternative Option: Filing for a Fictitious Name
For a business owner to change their business name, you will need to register for a Fictitious Name or DBA (Doing Business As) with your local business license office.
The new business name must be distinguishable from the existing names of other business entities already on file.
Ensure the Fictitious Name or DBA document is filed before you file Articles of Amendment, Articles of Organization, or Articles of Incorporation.
When Is the Best Moment to Rename My LLC?
When you're sure the new company name won't disrupt business activities or cause legal issues, it's time to change your LLC name.
How Long Does It Take for a Business Name to Be Approved by the State After Filing Forms?
This is determined on a state-by-state basis, although most states approve modifications within two weeks.
How Much Does It Cost to Rename My LLC?
Changing the name of an LLC is usually not more than $100, although this will vary depending on your state.
Is It Possible for Me to Have Several Companies Under One LLC?
Yes, but You’ll Need Numerous LLC Operating Agreements and a New Federal Tax Identification Number.
Is It Possible to Rename Your LLC?
The short answer is yes, with some specific procedures.
Is It Difficult to Change the Name of Your Limited Liability Company?
No, it is not difficult to change your LLC name. You'll need to follow specific procedures to make the change, but it is typically an easy process.
Is It Possible to Update the Name on Your Ein?
Yes, you will need to update the name on your EIN when you change your LLC name.
Make sure to take this one step further and include it in your new LLC filing too.
Is There Tax or Other Consequences to Changing Your LLC Name?
Changing your LLC name does not have any direct tax or legal consequences for things like liability protection, taxes, or business filings.
LLC Name Change: Conclusion
To summarize, if you're convinced that your LLC name is correct for good reasons, don't wait.
If you still have concerns about changing the business name, please do not hesitate to contact a professional for legal advice.