Sole Proprietor

Fictitious Business Names

Fictitious Business Names (FBN) or, as commonly referred to, a “DBA” (Doing Business As), are business names that must be registered with the county clerk of the county in which you are conducting your business. In California, a Fictitious Business Name Statement is required to be filed with the county recorder if:

• A Sole Proprietorship is doing business under a name that does not contain the owner’s surname (last name);
• If the business operates as a general partnership;
• If the business operates as a corporation and does business under a name other than its legal name as registered with the California Secretary of State.

If your business falls into one of these categories, you must register your fictitious business name. This can be done, with the assistance of a business attorney, by doing the following:

• Complete and submit a Fictitious Business Name statement in every county in which your business operates;
• Pay the appropriate filing fees;
• Publish your fictitious business name in a newspaper of general circulation in every county in which your business operates. Your publication must appear at least once per week for four consecutive weeks;
• File an affidavit of publication with each county recorder.

Fictitious Business Name Registration For Sole Proprietorship

Once your fictitious business name is properly registered, you may conduct business under that name.

Fictitious business name registration is also used to protect your intellectual property rights in a particular trade name. By recording your FBN, you are giving the public notice of your claim to the rights to use that name. Without it, the public or another business owner may have no way of knowing you have the exclusive right to use the name in the county in which it is registered and your right to such exclusive use may be at risk.

If you are starting a business, it is essential to consider whether you are required to register your fictitious business name. A Tailored Legal business attorney can quickly help you decide whether it is necessary and can offer you an affordable fixed fee within your business budget for the registration process. Contact us today for an initial consultation regarding your fictitious business name.

Tax ID and Classification

Tax liability is one of the most important considerations when starting a new business. No matter which type of business entity you choose (see Incorporation, S-Corporation, LLC or Partnership), it is critical to seek professional advice before choosing a particular tax classification for your business.

When you start your new business, you will need to apply for an Employer Identification Number (EIN), also known as a Tax ID Number. Don’t be fooled by its name. Even if you don’t intend to hire employees in your business, you will need to obtain an EIN from the IRS for your business so that your business and individual tax returns are distinguished.

Different types of business entities provide you with several options for tax classification. An S-Corporation will allow you to reduce your self-employment tax liability but provides less flexibility if you are starting a new business with a partner. If you form a single-member LLC, you may elect to be treated by the IRS as a disregarded entity which may help simplify your annual tax preparation. On the other hand, if your LLC has multiple members, you can select partnership tax classification which will provide you with much flexibility in allocating profits and losses between members.

Electing the wrong tax classification may create unwanted problems for your new business. It can be costly and time consuming to change your tax classification with the IRS and the agency often requires you to wait until the following calendar year before the new tax classification takes effect. This can cost you thousands in tax liabilities that might have otherwise been reduced or avoided if you elected the appropriate tax classification for your business at the time of its formation.

At Tailored Legal, our business attorney can apply for and obtain a new Tax ID number and help you select the most favorable tax classification for your business. We will also utilize our trusted network of financial and accounting advisors to ensure the tax classification you select is appropriate for your type of business. Contact us for an initial consultation today to discuss the right tax classification for your business.