The Difference Between an Assumed Name and a Legal Name

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Every person and business has a legal name. Some also have an assumed name by which they are known. A legal name is the official name by which the government knows the person or business. An assumed name is any other name used in business.

Legal Name

For a person, your legal name is the name that appears on your birth certificate and Social Security card. If you do business as a sole proprietorship, the same name is often the legal name of your business. The legal name for partnerships not required to register with the government is the name chosen by the partners and included in a partnership agreement or the combined last names of the partners. For example, the legal name of a partnership formed by John Smith and Jane Doe is Smith and Doe. Business entities that register with the state government, such as corporations and limited liability companies, also have a legal name: the name used in the registration documents.

Assumed Name

Assumed names are also called "fictitious names," "doing business as names" and "trade names." These are names that a person or business elects to use in the course of business instead of a legal name. For example, "Pepsi" could be considered an assumed name of the company legally known as PepsiCo.

Getting an Assumed Name

In some states, you do not have to register an assumed name to use it in business. Some states, even if they don't have a registration requirement, allow you to register an assumed name to prevent anyone else from using it. Other states do require that you register an assumed name before using it in business. Some states require registration with the Secretary of State while others require registration with the clerk of the court in the county where the business is located.

When to Use an Assumed Name

Whether to use an assumed name is a personal decision. Any person or company can always use its legal name in business. However, you may want to use an assumed name to simplify a long business name or make it clear what type of business you are in. For example, an mechanic named "Jack Johnson" might want to do business under "Jack's Body Shop," both to avoid confusion with the musician of the same name and to let the public know he works on car bodies.