Depending upon exactly what is being changed, your work may be cut out for you, and parts are often missed. Which is especially important when it comes to payroll. Let’s start with identifying what name is actually changing. A corporation or LLC has a registered name which can be indicated as such in the name of the business. That business may decide to operate under a different name to the public. This would be the doing business as (DBA) name, which some states will call a Fictitious Name or Trade Name. For example, Makin’ Money, Inc. can operate an ice cream parlor under the DBA name Chilly Willies.
The easier of the two to change is the DBA name. Most states will require a filing with the state’s Division of Corporations for the business to secure the name and ensure another business may not use that same name. If your business is a sole proprietor or partnership and you are operating in a name other than the names of the owner(s), then you will need a DBA name.
If you are changing your business legal name, the name of the Inc or LLC, then it gets complicated. Once the business receives approval by its shareholders/members, the name of the business needs to be changed with your state Division of Corporations. This is typically a simple process that involves a small filing fee and in many cases where the process stops, but there is more.
Of course, you are changing the name of your business with your bank, vendors and customers, but what many do not realize is that state agencies rarely communicate with each other. A business must still change the business name with the Unemployment Office and/or the Department of Revenue. Think of them just as you would with notifying your business name change to your vendors. The only difference here is those agencies will have specific forms with which to make that change. For example, a business in the state of Florida would use the RTS-3 or the DE-1 for businesses in California.
Lastly, and maybe most important, is to change the business name with the IRS. This is commonly overlooked and can cause issues when filing and paying taxes if the name on the filing does not match the name the IRS has on file. The name can be changed when you file your annual tax return by indicating as such on the return, but in between filings, it can be done by mailing a letter stating the change, signed by an officer to the IRS where you typically file your returns. You can find more at the IRS website.
There are some cases where a name change is not allowed. This includes instances where the structure of the entity also changes, for example, changing from a sole proprietor to a corporation or vice-versa. This would require a completely new entity to be formed and a new Federal Employer Identification Number (FEIN).