Perhaps you’ve made a mistake in naming your INC; or maybe your business model has changed. Either way, you and your INC’s officers, directors, & shareholders have decided it’s time to change the name of the corporation.
Before you change your Corp’s name, consider your options.
Corporation Name Change Options
Consider a DBA instead
Changing your INC’s name will have lots of potential ramifications aside from the process of the name change (see Other Considerations below). Instead of changing the Corp’s name, consider filing a DBA (AKA: Assumed Business Name or Fictitious Name). If your INC is operating a new business, your INC could file a DBA within the county or state it operates, and this would connect your existing INC to that new business name. For example, if your INC is called ABC, INC and it is now operating a floral website known as “ABCFlorists.com”, you could file a DBA publically stating that you are now operating as “ABC, INC, doing business as ABCFlorists.com”. If this option appears to be feasible, check with your state filing agency or county clerk/recorder for DBA filing options.
Form a new INC or LLC
If you’ve expanded and/or opened up a new business, rather than change the name of the existing INC, consider forming a new INC or LLC to own and operate the new or expanded business operations. By separating the existing business from the new/expanded business into two entities, you’ve separated the liabilities of each as well. This option of course carries with it the additional costs of maintaining two entities in your state, instead of one. And there may be some additional accounting charges for additional filings with the IRS. Check with your accounting professional before you move forward with this option.
The Process to Change the Entity Name
Making any big changes starts with your Board of Directors. Even if there is only one person occupying all the roles of the corporation, a corporation must formally make the decision to change its name. The Board should call a special meeting of directors, then vote on it, and then document in minutes or sign a unanimous consent to the change.
Because the decision to change the name is such a large one, it would be also recommended to get the vote of the shareholders. This involves holding a special meeting of the shareholders (assuming the annual meeting isn’t close enough). Likewise, it should be voted on and documented in meeting minutes.
File the Corporate Name Change with the State
Once the decision to change the company name was documented, change it with the formation state. This is done by filing Articles of Amendment with the state agency that formed your INC. Articles of Amendment are typically made available by the state for download. After correctly filling out the amendment form(s), submit to the state with the appropriate fee. Upon acceptance by the state, the amendment, and therefore the INC name change is filed.
03 Other considerations of an INC name change
Although you may be done with the process of officially changing the name of the INC with the state, there are still other agencies, vendors, and others who should be notified of the change you have just made.
Write a letter to the IRS telling them of the INC name change and send it here: IRS-Stop 343G, Cincinnati, OH 45999. For more information about this, go here: http://www.irs.gov/Individuals/Business-Name-Change.
If your business has registered for a sales tax ID, Use Tax ID, occupational license, permits, etc., because it would have been your INC (the owner of the business) that applied for these, you will most likely need to update the record for each. Check with your state taxing body, usually the State Dept. of Revenue.
County & Local Governmental Agencies
If your business has registered for a sales tax ID, Use Tax ID, occupational license, permits, etc., because it would have been your INC (the owner of the business) that applied for these, you will most likely need to update the record for each.
Your bank needs to update its record as well. You will need to take in a copy of the filed articles of amendment showing them the change. A new card with officer signatures maybe required as well. Also, your checks may need to be re-ordered, reflecting the new name.
Assuming you are not acting as your Corporation’s registered agent, the person or company providing this service, must be notified of the change. Otherwise he/she/they will not know that your company is the same as the newly named INC that it receives notices from the state or legal inquires or lawsuits on its behalf.
There maybe other vendors that have provided credit or have signed contracts with your INC, which need to be notified of the change.
Yes, there are a lot of formalities to follow when your corporation decides to change its name. However, if you follow a systematic process, as outlined above, your corporation will remain a rock solid veil of protection to its business and assets.