Fictitious Business Name Definition

A fictitious business name is a registered trade name that allows a business to operate under a name that doesn’t match its business’s legal name. This definition could cover a sole proprietor using a name that sounds like a business name, such as John Smith operating his business as “Totally Twisted Tacos.” It could also cover a limited liability company or corporation creating an alternate business name so they can legally operate under a nickname for a specific branch of their business.

This guide will explain what a fictitious business name is, its other names, and more.

Other Names for a Fictitious Business Name

Although the definition of a fictitious business name may seem self-explanatory, the term itself often leaves people confused because it’s used interchangeably with other names: 

• Doing business as (DBA)
• Assumed name
• Trade name

All the terms mean the same thing, although DBA is one of the most popular terms used. 

Fictitious Business Name Benefits

Many small businesses can benefit from a fictitious business name, including limited liability companies, corporations, and sole proprietorships. In fact, these small businesses can enjoy several benefits. States often require that businesses register their name and identify the legal entity they’ll operate under. For example, if a business owner starts an LLC, the state may require them to place “LLC” or “limited liability company” in their registered business name. If an entrepreneur prefers to keep the title “LLC” or “corporation” out of their advertising materials, obtaining a fictitious business name would be the way to go. 

Meanwhile, if an entrepreneur operates as a sole proprietorship or general partnership, they’ll find that the state requires them to use their own name as the business name, unless they register a fictitious business name. If the company wants to use a name that’s more creative and catchy, they’ll need a fictitious business name.

Another fictitious business name advantage comes when it’s time to broaden the scope of a business. Using a fictitious business name can also help business owners expand their business without the need to create a separate legal entity. 

A great advantage of using a fictitious business name is that an entrepreneur can target their specific market. Business owners often use fictitious business names to draw in customers with a name geared toward potential clients. Ultimately, if the fictitious name that a company has registered doesn’t work or otherwise proves to be unhelpful, they can have the benefit of tweaking the fictitious name while the business’s registered name remains the same.

One final advantage is that one business can operate under multiple fictitious business names at a time. 

Fictitious Business Name Considerations

The process for fictitious name registration can vary from one state to another. But generally speaking, to operate under a fictitious business name, a business owner will need to register in the state or county where the business is registered. These business owners will also need to ensure that they adhere to the registration requirements in their area, which may come at the state or county level.

It’s also important to remember that fictitious name registration doesn’t create a separate legal entity. Using a DBA doesn’t stop a sole proprietorship or partnership from facing personal liability risks, like setting up an LLC or corporation will. All business activity conducted under the fictitious business name remains traceable to the original legal entity and its owners. 

Fictitious Business Name Examples

Here’s a practical look at how a fictitious business name registration might work.

Suppose a team of business owners wants to name their business “Lester, Johnson, & Rivers, LLC” because having the names of the business owners on the company’s registered name is important to them. Since this business name is very general, it could benefit the company to register a DBA. For example, if the business is a consulting firm, the fictitious business name could be something like “Elite Consulting.” Using a different name will allow potential clients to easily identify the business based on the services they’re looking for and that the business provides. 

Fictitious Business Names in a Nutshell

A fictitious business name allows a business to operate legally under an assumed name. One of the most attractive fictitious business name benefits is that registering a fictitious name allows a business owner to expand their business and connect with their target audience. However, registering a fictitious business name doesn’t create a separate legal entity and doesn’t stop an owner from facing liability. 

Recommended: Scammers Use SBA name