What Is The Big Deal It Is Only A Name?

July 25, 2017

By: David M. Bastiaans

Many businesses use a name that is different from its legal name called a trade or fictitious name.  This can happen by simply dropping the “Corp.,” “Inc.,” “LLC,” etc. from the legal name of the business entity.  For example, an entity created as “ABC Contracting, LLC” conducts business as “ABC Contracting”.  The later name, ABC Contracting, is considered a fictitious name of ABC Contracting, LLC.

When a person or an entity conducts business using a name that is different from its legal name, Virginia law requires a person or entity to file a certificate in the circuit court for the city where the business is conducted.  Business entities have a further filing requirement with the State Corporation Commission.  Business entities registered with the state corporation commission must file with the State Corporation Commission a certified copy of the certificate filed in circuit court.

The cost of complying with the filing of fictitious name certificate is nominal compared to the penalty for failing to file.  The total filing fees are $22.50 which consist of (i) circuit court filing fees of $10; (ii) certified copy fee of $2.50 and (iii) state corporation commission fee of $10.  The penalties for not complying with the statutes are punishable with a misdemeanor offense plus a fine up to $2,500 or jail for up to a year.  In addition, the person or business entity cannot maintain a legal action in any court until they are in compliance by filing the certificate in accordance with the statute.

It is important to understand that the requirements and filing of a certificate of fictitious name is not the same thing as registering for a trademark.  Trademarks are an entirely separate segment of the law from the fictitious name certificates.  Unlike a trademark, filing the certificate provides absolutely no protection to prevent others from using your business name.  Please see a future blog on trademarks.