It Does Matter What You Call Your Firm--for a Lot of Reasons
Naming a business is not as simple as it may seem.
“The name is how potential clients and customers begin to recognize the product or service and your business,” said Debra Esparza, director of USC’s Business Expansion Network.
Starbucks shows what a powerful marketing tool a name can be.
Named after a character in “Moby Dick,” the coffeehouse chain has become a nationally recognized brand and pulls in business with its name alone. It has leveraged its name to sell ice cream and beverages in supermarkets.
Some entrepreneurs pick a name that conveys the kind of business they own. Others use a family name or one that has special meaning.
For an accountant named Susan Randolph who has worked for years at a corporate firm, using her own name might be a good idea. “Susan Randolph, CPA,” capitalizes on her reputation, whereas a generic name such as “A-1 CPA” does not.
“In a consulting or professional service, the reputation is what people are buying,” Esparza said.
A consultant using his or her own name for the business may still want to make it more descriptive. “Hugo Smith Co.” doesn’t adequately describe the business, but “Hugo Smith Graphic Design” does.
In a consumer business, a more descriptive name might be appropriate. A name like “Wrapped & Ready Gifts” tells customers they can walk in, buy a gift, have it wrapped and leave, Esparza said.
Descriptive names work well for neighborhood businesses, but if they are too cute, they may not travel well when the owners want to expand.
Two women who started a recycling business in West Los Angeles called themselves Pickup Artists. But as they expanded and their work included delivering recycled products and consulting for large corporations and hotel chains, they realized their business was outgrowing its name. The company is now holding a contest to solicit suggestions for a new name.
State regulations outlined in the California Business and Professions Code also must be considered. If you are the sole owner and your last name is in the business name, you are very likely to be exempt from filing a fictitious-name statement. Otherwise, you must file the statement, which is also called a DBA, for “doing business as.”
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For example, if Susan Randolph uses her entire name or even just “Randolph CPA,” she does not need to file a fictitious-name statement. However, if she calls herself “A-1 CPA,” she would need to obtain a DBA. Even if she used “Susan, Your CPA” as her company name, she would have to file the statement, because there could be any number of CPAs named Susan doing business.
If she uses a name such as “Randolph & Associates,” she still needs to file the DBA, because the word “associates” implies that other people are involved in the business. This principle applies to business names using words such as “company,” “& company,” “& sons” (or “daughters,” “brothers” or “sisters”).
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Filing a DBA serves at least three purposes. It establishes the relationship between the business and the business owner by identifying who is doing business under what name and at what locations. That identification helps protect both the consumer and the business owner.
For the consumer, the DBA identifies who is ultimately responsible for what happens in the business. For the owner, it can help if legal problems arise, Esparza said. For example, if two businesses with similar names exist, both businesses could end up being sued.
With a DBA, it is an easy matter for a business owner who is named in a lawsuit to show that he or she is not the entity involved. Without the document, the business owner must produce receipts, bills of sale, Social Security numbers or other paperwork, Esparza said.
The DBA also helps protect the name of the business from being duplicated. If two entrepreneurs want to call their businesses “Speedy Cleaners,” state regulations say that whoever files the name first has the sole right to it. The second business owner has to pick another name.
Finally, a DBA helps when owners seek loans or credit, because banks often require official documentation that proves the person is actually in business. Often, business owners will file a DBA even if one isn’t required, because they want to give the document to the bank.
A fictitious-name statement should be filed with the county clerk or recorder in the counties in which your company is doing business. If your business expands to another county, adds owners or changes ownership, you need to amend the statement.
After coming up with a fictitious name, you should check the list on file in the county clerk’s office to make sure the name hasn’t already been chosen. If it has been, you can’t simply go to another county, file the name there and use it in the first county. You must conduct business in the county in which you have filed.
DBA fees range from $10 to $35. The name is yours for five years; then you must renew it.
In Southern California, you can file a fictitious-name statement at the following locations:
* Los Angeles County: Registrar-Recorder/County Clerk’s Office, Business Filing and Registration Section, 12400 Imperial Highway, Norwalk, CA 90605. (562) 462-2177. Hours: 8 a.m. to 5 p.m. Arrive at least 45 minutes before closing. Fee: $10, plus $2 for each additional owner name. By mail: Business Filings and Registration, P.O. Box 592, Los Angeles, CA 90053-0592. For online information: https://www.co.la.ca.us/regrec/main.htm
* Orange County: County Clerk-Recorder’s Office, Hall of Records and Finance, 12 Civic Plaza, Room 106, Santa Ana, CA 92702. (714) 834-3005. Hours: 8 a.m. to 4:30 p.m. By mail: Attn. Gary L. Granville, County Clerk/Recorder, P.O. Box 2038, Santa Ana, CA 92702-0238. Fee: $31, plus $7 per owner if more than two and if more than one business name.
* San Bernardino County: Fictitious Businesses, County Recorder’s Office, 222 W. Hospitality Lane, San Bernardino, CA 92415. (909) 386-8970. Hours: 8 a.m. to 5 p.m. Fee: $29, plus $5 for each additional owner.
* Riverside County: County Clerk and Recorder’s Office, 2724 Gateway Drive, Riverside, CA 92507, and 45-116 Commerce St., Suite 1, Indio, CA 92201. (909) 486-7000. Hours: Monday through Thursday, 8 a.m. to 5 p.m. Closed alternate Fridays. Fee: $31, plus $7 for each additional owner.
* Ventura County: County Clerk’s Office, Government Center, Hall of Administration, Lower Plaza, 800 S. Victoria Ave., Ventura, CA 93009. (805) 654-3790. Hours: 8 a.m. to 5 p.m. Fee: $26, plus $5 for each additional business name or owner. Online information: https://www.ventura.org/recorder/business.htm
State regulations require the owner to publish the name in a general-circulation newspaper in the part of the county where the firm is doing business, within 30 days of filing the name. After publishing the name once a week for four consecutive weeks, the owner must send proof of publication to the county clerk’s office within a month of the fourth publication date.
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Exercise: Devise a business name and check in your county to see if anyone has already filed under that name.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Entrepreneurship 101
Chapter 2: HOW TO START A BUSINESS
* Define the Business Concept
* Name the Business
* Deal With Red Tape
* Decide on a Business Structure
* Determine Start-Up Costs
Chapter 2: HOW TO START A BUSINESS
Chapter 3: HOW TO DEVELOP A BUSINESS PLAN
Chapter 4: HOW TO FINANCE YOUR BUSINESS
Chapter 5:HOW TO GROW YOUR BUSINESS
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
The Bottom Line
“Entrepreneurship 101” is a tutorial on how to choose, start, finance, plan and grow a business. The program, written by Times staff writer Vicki Torres, was developed by Debra Esparza, a faculty member at the Entrepreneur Program of USC’s Marshall School of Business. Esparza also heads USC’s Business Expansion Network, a community and economic development project that has counseled more than 5,000 small-business owners in the Los Angeles area over the last six years. BEN provides help with financing, business planning, accounting, marketing and other issues. The tutorial can also be found on The Times’ Small Business Web site at https://www.latimes.com/smallbiz
