In my last post, I discussed why small business owners should consider incorporating their business even if they are “just a consultant,” “just a contractor,” or their business is “just their side gig.” For those business owners that decide that the costs of incorporation outweigh the benefits of protection from personal liability, there is another issue to consider: ARE YOU VIOLATING TEXAS LAW BY FAILING TO REGISTER YOUR ABUSINESS NAME?
A DBA is an “Assumed Name”
An “assumed name” or DBA (“doing business as”), is a name other than your legal name. Texas law requires that an unincorporated business that operates under a name that does not contain the surname (last name) of the owner, must file an Assumed Name Certificate. For example, if Joe Smith operates a roofing company as “Houston Roofing Company,” he must file an Assumed Name Certificate. If Mr. Smith operates “Joe’s Roofing,” he must file an Assumed Name Certificate. “Joe Smith’s Roofing” is not required to file.
This is rule is also true for businesses that are incorporated but operate under something other than their legal name. For example, if Houston Roofing Company, Inc., uses work orders listing its name as “Houston Roofing,” it is technically using a an assumed name, and under the statute must file an Assumed Name Certificate .
How to Register your Assumed Name
If you are operating under an assumed name, you are required by Texas law to register the name. Where you register depends on the type of enterprise you are operating. An unincorporated entity must file with appropriate counties. An incorporated entity must file an Assumed Name Certificate both with the Texas Secretary of State and the appropriate county.
Trademark Issues
Another important thing to not about assumed names is that registration of the name does NOT give you the right to use the name if it infringes on another protected name. This is a trademark issue that is beyond the scope of this post, but something to keep in mind an to discuss with your attorney.
This article is for informational purposes only and does not constitute legal or tax advice. Please seek advice of a licensed attorney before making any legal decisions.
Leigh K. Freeman is a wife, mom and attorney located in The Woodlands, Texas.
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