Personal Finance

The ultimate business name change checklist + guide

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If you’re venturing into a new industry, making a company name change could be a way to accelerate the success of your brand. Not sure how to go about this process? We’ve provided a guide and a comprehensive business name change checklist on how to do so.

Change can be intimidating, especially when it comes to modifying the business name that you and your customers have been familiar with for a long time. However, sometimes this change is necessary to allow new opportunities. As long as you follow the right steps and maintain small business insurance coverage, everything should go smoothly. 

 

4 things to consider before changing a business name

If you’re still unsure about renaming your business, here are important factors and implications you should consider before making the final decision. 

1. The cost of changing business names

Most states charge a fee to process your business name change paperwork. Though the fee can vary from state to state, it usually ranges from $20 to $150

Apart from the filing fee of a business name change, the renaming process can also incur other costs associated with activities such as website and logo redesign, checking trademark and domain availability, hiring outside expertise, etc.  

The cost of making a name change can also vary depending on the size and type of your business. For example, for large corporations that involve many decision-makers, this change might require the consent and approval of the corporation’s board of directors and stakeholders, which can take a substantial amount of time and resources. 

2. Your clients’ and customers’ opinions

Customer loyalty is one of the most important factors when it comes to building a sustainable and successful business. Without the support of clients and customers, a business would not have the fuel to continue operating smoothly. 

Before making the decision to rename your business, it is of utmost importance to consult with your loyal customers and take into consideration their opinions by conducting a survey or poll. Though rebranding your business through a name change could potentially help attract customers in new target markets, it could also run the risk of losing trust with your current audience. 

3. The option to register a DBA instead

A DBA, which stands for “doing business as,” is often used by sole proprietors or partnerships that want to operate their business under a different name. Since you’re not officially changing your entity name, there’s no need to go through the process of changing business licenses, bank account names and legal documents. 

As a sole proprietor, registering a DBA is one of the most affordable ways to create a separate business name without having to form an LLC or corporation. However, the disadvantage of registering a DBA as a sole proprietor is the lack of liability protection and tax benefits. 

For LLCs and corporations, filing a DBA will allow you the right to conduct business under a name that is different from the name used to file your LLC or corporation paperwork. 

4. The availability of the new business name 

Before going through with the official name change, it is crucial that you first check the availability of the chosen name. No matter which state you’re in, you will not be allowed to register your business name if it’s already taken by another business. 

The process of checking for availability can vary from state to state, but in most cases, you can conduct a name availability check within the Secretary of State’s database

 

How to change your business name

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Depending on your business entity type, the official name change process might look a bit different. However, whether your company is registered as a sole proprietorship, LLC, partnership or corporation, taking the right steps to conduct an official name change will save you a lot of time and hassle in the future.  

Notify the state in which your business operates

For sole proprietors or partnerships that are currently operating under a fictitious business name, you can contact the local government office and inquire about the steps necessary to update or create a new DBA. 

For LLCs and corporations, changing business names will generally require filing a name amendment with the state of incorporation. If the business operates in multiple states, a name amendment must be filed with the additional states as well. 

File the official name change with the IRS

For federal tax purposes, it is crucial to inform the Internal Revenue Service (IRS) of your name change. The exact process differs depending on your business legal type. If you own a sole proprietorship, contact the IRS using the address you mailed your tax return to. 

  • If you have a partnership, notify the IRS when you’re filing your tax return on Form 1065. But if you’ve already filed your return for the year, contact the IRS using the address where you mailed the tax return.
  • If you are a single-member LLC, follow the same process as sole proprietors. And for multi-member LLCs, follow the same process as partnerships.
  • For corporations, notify the IRS of your name change when filing the annual tax return on Form 1120. If you’ve already filed your return for the year, write the IRS using the same address where you filed your return. 

Determine if you need a new EIN

In most cases, changing your business entity name does not require a new employer identification number (EIN). However, if you eventually decide to change the structure or ownership of the business after the renaming or rebranding process, you might want to visit the IRS employer identification number document to evaluate whether or not applying for a new EIN is necessary. 

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Update permits and licenses

Business permits and licenses can be federal, state or local. For example, sales tax permits on the state level and building permits on the local level. After making an official name change, it’s important to contact the government agencies associated with each of your permits and licenses and have them updated. 

Make sure employees are aware of the change

Before announcing the name change to the public, make sure that every one of your employees is aware of the change first. In addition, explain why the business name change was a necessary decision so that everyone is on the same page.  

Notify clients and customers

After all employees have been informed of the change, it’s time to officially announce it to clients and customers. When communicating this decision to customers, it’s important to provide assurance that the change is positive and is in the interest of all stakeholders. 

This announcement can be made through email, the company website, social media or an official blog post from the CEO. No matter which platform, the message should be communicated in a positive and enthusiastic manner to instill trust and excitement in all customers. 

Update company information

After the name change is approved, it’s time to update all of your company information to make sure it is consistent with your new business name and brand style. Though the process might be time-consuming, it is absolutely necessary to avoid any confusion or inconvenience in the future. 

For example, if your company has a website, you should update it as soon as possible. Company materials such as brochures, business cards, physical merchandise, invoices, stationery and anything else that has your business name displayed should be updated as well. 

 

How to come up with a business name that’s effective

Naming your business might seem like a straightforward process, but it can actually take quite a bit of brainstorming to come up with a name that is truly unique and aligns with your brand. 

Struggling to create the right business name? Here are some tips to help you out. 

 

Make it user-friendly and simple

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One of the first factors you should consider when naming your business is how simple it is for customers to remember the name. The last thing customers want when looking up your business on Google is having to take extra time to spell out a complicated word. Make your name easy to spell, pronounce and under 4 syllables to help customers recognize your brand with little effort.  

The best examples of simple and catchy brand names are businesses like LEGO, Apple, Taco Bell and Coca-Cola. These straightforward names also make it easy for customers in non-English-speaking countries to engage with your brand.

Keep your differentiators in mind

What makes your business stand out from competitors? Is it the fast delivery, the extraordinary customer service or the innovative solutions you provide? Take the time to do a competitor analysis and think about how your venture is unique from others. Then, when coming up with your brand name, keep these differentiating factors in mind to get your creative juices flowing. 

For example, to better convey its speedy food delivery service, DoorDash changed its name from Palo Alto Delivery in 2013 to its current name and has seen massive success ever since. 

Use acronyms and abbreviations

Did you know that the famous Swedish furniture store IKEA is actually an abbreviation of the long name “Ingvar Kamprad Elmtaryd Agunnaryd”? If you have a business name idea but you’re worried that it may be too long, consider abbreviating it to make it more catchy and memorable. 

Communicate your company mission and value

The carmaker Tesla’s name was inspired by the Serbian-American scientist Nikola Tesla, who invented the alternating current electricity system and many other world-changing creations. In an interview, Tesla CEO Elon Musk paid tribute to the scientist by saying, “Without his vision and brilliance, our car wouldn't be possible.” By associating the company with Nikola Tesla, Musk clearly conveys the company’s vision of providing clean energy and electricity to the world, which was also the scientists’ lifelong dream. 

Before naming your company, it’s important to reflect on who you are as a business and what you are trying to achieve. This way, you can better communicate your mission and value to your customers through your business name. Ask yourself:

  • What do you want your customers to think of when they see your brand? 
  • What positive emotions do you want to invoke in them?
  • How would you describe your business to others?
  • What is your company’s ultimate purpose?

 

Business name change checklist 

Ready for a brand name change? To make the process a bit easier for you, we’ve created a checklist to help you keep track of everything and make sure you’re not missing any important steps. 

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Business name change checklist
Download here

Changing your business name might sound like a daunting and complicated task at first thought, but as long as you follow the proper steps, it can become an exciting process that leads your business to new opportunities and expansions. 

Owning a business comes with responsibilities as well as the freedom to make empowering decisions to guide your venture in a whole new direction, such as making a name change. To ensure your company is protected along the way, visit The Zebra today to get the best small business insurance coverage.

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