Businesses change names for a variety of reasons, typically strategic. A business may have outgrown its name and needs to redefine its identity. Two businesses may join forces and need a name that represents the new vision. And sometimes businesses need to get away from a name associated with a negative experience or event.
A business name change requires a coordinated effort to ensure compliance with all applicable laws and contractual arrangements. The goal is to complete the transition with minimal disruption, risk, and additional expense.
Knowing which documents need to be filed and which organizations to notify can help make the shift to the new business name as seamless as possible. The Stamford business lawyers at Wofsey Rosen advise businesses to be aware of the following legal requirements when changing a business name.
Internal and State Approval are Required to Change a Business Name
A business’s operating agreement specifies the procedures for amending the agreement, including changing the business name. After securing and recording internal approval of the name change, the new name must be cleared at the state level.
Updating a business name in Connecticut begins by filing an amendment through the Business.CT.gov dashboard. A business records search must be conducted to ensure the proposed name is available.
The business formation type determines the fee for changing a business name.
- LLC & LLP – $120
- Stock corporation – $100
- Non-stock corporation – $20
Once official approval from the Secretary of State has been received (typically a few business days), it should be used to notify relevant organizations and agencies of the new name.
Name Change Requirements When a Business Operates Out of State, Uses a Trade Name, or is Trademarked
If the business operates in states other than Connecticut, a Certificate of Good Standing must be obtained from the Secretary of State and submitted, along with an amended registration application, in each foreign jurisdiction.
A business operating under a trade name or doing business as (DBA) must cancel or amend the registered trade name in every location where it has been filed.
The owner of a registered trademark must use the Assignment Center on the United States Patent and Trademark Office (USPTO) website to request a name change. Processing can take about a week.
State and Federal Taxing Authorities Must Be Notified of a Business Name Change
The specific action necessary to notify the IRS of a business name change depends on the type of business organization. Notification cannot be made online; it is accomplished either by sending a written notice or by checking a box when filing the business’s tax return. Unless the business entity is changing along with the business name, a new Employer Identification Number (EIN) is not necessary.
The Connecticut Department of Revenue Services (CDR) must be notified of a business name change using 𝗺𝘆𝗰𝗼𝗻𝗻𝗲𝗖𝗧.
Business name changes also need to be sent to the CT Department of Labor via an email to DOL.STATUS@CT.GOV, and include a copy of either:
- The Certificate of Amendment from the Secretary of State showing the name change, or
- An IRS letter showing the name change and the EIN
Failure to timely notify taxing authorities of a business name change can result in payment and processing delays, fines, and potential invalidation of necessary contracts or licenses.
Business Licenses and Permits have to be Updated When a Business Name Changes
Businesses operating in regulated industries must update state-level professional or operational licenses and permits to reflect business name changes. Depending on the business, updated information needs to be filed with the Department of Consumer Protection (DCP), the Department of Public Health (DPH), and the CT Insurance Department (CID).
Local permits and licenses, which may include zoning, health, and signage, need to be updated promptly in accordance with local procedures to maintain compliance and avoid penalties.
Businesses involved in federally regulated activities, such as alcohol sales, agriculture, aviation, firearms, broadcasting, and wildlife or fisheries, must notify the relevant regulatory agency and update their federal records.
A Business Name Change May Trigger Compliance Issues in Existing Contracts
Changing a business’s name does not invalidate existing business relationships, but it can complicate operations if documents are not updated to reflect the new name.
Operational accounts (financial) and contracts (services, supplies) need to be updated immediately upon state approval of the new business name to avoid interruptions in business activity and payment processing.
Websites, social media accounts, and marketing materials should also be updated without delay to prevent customer confusion, protect the business brand, and avoid issues related to unfair trade practices.
Iconic Business Name Changes that Proved Good for Business
Many of today’s most iconic business brands are survivors of name changes. Business names selected at the outset of operations may prove unworkable, and new names evolve that stick. The following well-known brands originally had very different names that few people may recognize.
- In 1893, a pharmacist created a soft drink known as Brad’s Drink, which was renamed Pepsi-Cola in 1898.
- Blue Ribbon Sports was founded in 1964 by a University of Oregon track coach and his former student, becoming Nike in 1971.
- Pete’s Super Submarines opened in Bridgeport, CT, in 1965 and transitioned to Subway in the early 1970s.
- Sound of Music was forced to have a ‘best buys’ parking lot sale after its largest store was hit by a tornado in 1981, leading to the renaming to Best Buy in 1983.
- In 1996, search engine BackRub came on the scene, only to be renamed Google in 1998.
Regulations governing business operations have become more complex over the last 25 years, largely due to consumer protection and environmental concerns. Compliance can be time-consuming and costly for businesses, impacting operations and hindering entrepreneurial incentive.
Let the Lawyers Handle Compliance Issues, While You Focus on Your Business
After a business name change, the goal is to quickly transfer the awareness and trust associated with the former name to the new name without alienating or losing current customers. Managing both regulatory compliance and rebranding efforts is a lot to take on during a critical business transition.
The experienced business attorneys at Wofsey Rosen are dedicated to supporting Connecticut businesses as they evolve and grow. If you’re changing your business name and need help navigating the process, Wofsey Rosen has your back so you can focus on moving forward.