Business Entities at the State Level: Trade Names
Today’s blog will deal with trade names. A trade name is also commonly referred to as “DBA’s (doing business as)” or “fictitious name” We will discuss what they are, how they work, and who would benefit most from filing a trade name at the state level.
A trade name is extremely similar to a sole proprietorship. In fact, they are basically the same thing except for one major difference. As a sole proprietor, you are working under your own name. For example, Pam is an avid painter and she sells her under her own name, Pam Beasley (she hasn’t met Jim yet). However with a trade name, Pam could sell her paintings under the assumed business name “Pam’s Paintings”.
One of the major benefits of an individual filing a trade name is that it provides them with a chance to obtain funding. Most lending institutions would be hesitant to provide funding that is intended for a business to an individual. At the very least, a trade name is often required by most banks in the United States in order to provide funding. The trade name form is simple to fill out with your local government; it’s often called a “Certificate of Assumed Name” or something similar and is usually filed with the County Clerk’s office.
If you have any other questions about whether filing a trade name is right for you, the professionals at The Center for Financial, Legal and Tax Planning are more than well-equipped to answer your questions. Please contact us at (618) 997-3436.