A business name can say a lot about you and your company. Even though it’s probably only one or two words, some very powerful first impressions may be drawn simply by reading the name. A good business name conveys what a company stands for, its values, and why it is distinct from other business entities.

Sometimes, for one reason or another, the proprietor of a business wishes to change the name of their company. Before doing this however, there should be a lot of thought put into the reasons for the wanted change and how a name change might affect the business. The name change decision may hold some repercussions that you as a business owner may not be equipped to handle.

If you have decided to change the name of your business there are specific actions that you must take which depend on the type of business organization that you have chosen for your company.

Sole Proprietorship

The name of a sole proprietorship may be changed by sending a letter notifying the IRS of the intended name change. The letter, which must be signed by the owner or an authorized delegate, should be addressed to the same destination where the owner files his/her return.

Corporation

The name of a corporation may be changed by filling in the appropriate information on the current year’s tax return form. If the name change occurs after the current year’s return has been filed, a letter, addressed to the same destination where the corporation files its return, can be sent notifying the IRS of the name change.

Partnership

The name of the partnership may be changed by filling in the appropriate information on the current year’s tax return form. If the name change occurs after the current year’s return has been filed, a letter, addressed to the same destination where the partnership files its return, can be sent notifying the IRS of the name change.

This information applies to the three main types of legal structures.  There are others available.  MetroAction recommends that you consult with you attorney and/or accountant before changing your business name. 

For more information, please go to www.irs.gov.

Choosing a business organization is one of the most important decisions you will make when starting your own company. It is, therefore, imperative that you understand the rules and regulations that are exclusive to each specific entity. It is also important that you clearly define every aspect of your business. By doing this you ensure that you will pick the correct business organization for your company. (more…)