Playing the Change-of-Name Game
Q: I bought a business as a sole proprietor two years ago. In the last few years, we’ve become more diversified, and I feel the current company name should be changed to reflect this. How does one go about changing a name? Will I have to apply for a new employer ID number and resale number?
--R.L. Mora, Los Angeles
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A: First, you will definitely want to get accounts squared away at your bank so you can deposit checks written out to your new name and accept credit card orders. To do that, you will need a new fictitious-name statement (also called a Doing Business As, or DBA, statement). Call a few newspapers and ask about package deals they offer for filing DBAs.
You should also check with your local city hall to find out whether you can merely file a change-in-name form or have to refile for a new business license and resale permit. In most cases, the form will do, but each municipality has its own rules.
If you have a tax identification number (as opposed to merely a Social Security number) because you have employees, you will also need to apply for new tax ID numbers. Call the Employment Development Department, the Franchise Tax Board and the Internal Revenue Service for information on their procedures.
Good business sense would also suggest that you inform all of your creditors and vendors when you change your name. Use this as an opportunity to spread your new name and build brand identity.
--Paul O’Reilly
Program director
The Entrepreneur’s Series
Valley Economic
Development Center
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A: Changing a company’s name can be somewhat risky, depending on why you’ve decided to do it. If you’re running the Pencil Shop, for instance, and you’re now selling computers, it’s definitely time to change your name.
But if customers are coming in and they don’t seem to be misled or confused by your current name, you may want to think twice about changing it. Another option could be simply modifying the name. For example, if you’ve expanded your product line, you could add to the current name.
Any time you make a name change, you should do a major ad campaign. All your current clientele should get something in the mail letting them know the name is changing and why. If you’re a retail store, put a sign or flyer up at the cash register. Make sure to start early, telling people that you are still providing the reliable services or wonderful product they are used to but are changing your name to better reflect the new and even more wonderful things you are now offering.
You might consider a transition period during which you go by both names. Definitely try to arrange something with the telephone company so that when people look up your old name they are referred to your new listing.
On the day the new name goes into effect, consider doing an in-store promotion--say, a party or open house, to announce it. Give everyone who shows up a refrigerator magnet or other small gift with your new name on it.
Before you decide to change your name, you might consider doing a customer survey or focus group. Ask people if they think you should change the name and if they like the one you’re considering. They will enjoy being asked, and they’ll feel part of the decision if you decide to make the change.
--Sylvia Rose
Marketing and communications consultant, Client/Member Services
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If you have a question about how to start or operate a small business, please mail it to Karen E. Klein in care of the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or e-mail it to business@latimes.com. Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.
