Share This Info:  

How Do You Transfer A Business Name When Buying A Business?

Comments & Replies: 4     Views: 13999     Posted By: Timothy Cunha JD  Timothy Cunha JD: Business Broker, SF Bay Area



Topics: Buying A Business, Deal Structures     Tags: buying a business, escrow bulk sales



It's fairly obvious that one of the valuable assets of almost any business is the business name - and all the market presence, familiarity, and good will associated with it.

So, how does that name get transferred to the new owner?

Let's assume that the buyer is forming a new corporate entity (a corporation or limited liability company "LLC") or is operating as a sole proprietorship. In many cases, the prior owner will need to file an official abandonment of the fictitious business name "FBN" (commonly called the "dba", for "doing business as") and the new owner will need to file an application to assume that name. This application is filed with the county where the business is located, and then a notice of the filing must be published in a legal "newspaper of record" within that county.

The new owner will need to establish identity and authority. If the new owner initially registers the FBN in an individual name, all that is needed is to establish personal identity. If registered as a corporate entity (Inc. or LLC) or a transfer it to a corporate entity, the new owner will need to establish that the entity is in "good standing" and that the individual has the authority to act on its behalf.

In any event, while I do not provide legal advice (I'm a member of the New Jersey Bar, not California), in my experience as a business owner, I would ALWAYS include my corporate name on every form, document, contract, receipt, and correspondence - regardless of having a fictitious name, so that there could be absolutely no misunderstanding that I am operating as a corporation or limited liability company and not as an individual. And, I would sign everything in my corporate capacity, not as an individual. (E.g., "John Doe, Managing Member of Doe Enterprises, LLC, dba 'Obadiah's Sub Shop' ".)

Alternatively, the new owner can establish their corporation or LLC with the name of the business, such as "Obadiah s Sub Shop, LLC" and always show the "Inc." "Corp.", or "LLC" as part of the name. Then there would be no need to file a fictitious name statement at all. (If the business name is part of the seller s corporate name, then the seller will need to file a simple application to change the name of the selling corporation to something else, e.g., "Obadiah's Old Business Entity, LLC".)

I suggest that business buyers always discuss this with a competent experienced business attorney so that the "corporate shield protections against personal liability are preserved, regardless of whether or not the business registers a fictitious name statement. Every transaction is different and every business unique, so sound legal advice is essential.

Contributor: Transactional Attorney

Good topic, Tim. This is an issue I frequently see buyers and sellers struggling with when I help businesses with their legal issues after they've completed the sale process.

In addition to fictitious business names (FBN or DBA), it's also important to take care of any trademark issues at the time of a sale. For example, if the business is named Acme Corp and has a federal registration for the Acme name as a trademark, you must have an assignment of the mark executed by the seller(s) and file an assignment recordation with the USPTO.

If the business is using a mark that hasn't been registered, it's a good time to consider whether you want to register and to complete an assignment agreement regardless (you won't need to record the assignment with the USPTO if the mark is not federally registered).


Mark, a good point on the trademarks and other intellectual property. And, adding to that, buyers have to be sure to properly transfer domain name registrations for any websites--whether active or dormant. At the same time, it wouldn't be a bad idea to secure similar-sounding domains if available.


  Helpful Resources To Assist In Selling And Buying California Businesses
Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Brad Steinberg, Business Broker: Laundromat Specialist

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.

Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
I am Buying A Business: Should I Buy The Property As Well? A Good Decision?

There are advantages and disadvantages to owning commercial property. Here are a few questions to ask when it comes to deciding whether or not to buy the property along with the business. Peter Siegel, MBA with the BizBen ProSell Program reviews this issue with potential sellers and intermediaries.

How Many Listings Is Too Many For One Broker To Handle? Is It 5? 10? 20?

Peter Siegel, MBA in this Vlog/Podcast discusses how many listings is too many for one business broker to handle at one time. Is it 5 is it 20? I recently had a coaching call with one of my BizBen broker clients who asked that question this week. There are many factors that go into the answer.

4 Reasons Why Business Brokers Do Not Cooperate With Other Brokers & Agents

Despite challenges in the business for sale marketplace, some of the business brokers who make a living by facilitating a deal between buyer and seller are known to stand in the way of a completed transaction because of some outdated ideas. Too bad they put greed ahead of the needs of their clients.

Financing Advice: Showing Add Backs To Get Business Acquisition Financing

When seeking business acquisition financing, it helps to review a seller's addbacks as a source of funding to service the debt service. But explain them correctly. Peter Siegel, MBA business acquisition financing expert and advisor at 925-785-3118 covers this topic on financing a business purchase.

The Bottomline: What Exactly Is Adjusted Net Income, SDC, And Cash Flow?

The use of add backs & adjusted net income is common among sellers of businesses when showing their financial information/performance. But buyers are cautioned to review financials and tax returns/documents closely. Peter Siegel, MBA with BizBen (ProBuy & ProSell Advisor, Lead Facilitator) explains.

Selling My Small Business: What Items Should I Have Ready To Be Successful?

When selling a small to mid-sized business, owners should have their paperwork and financial information ready to go! They should also have a short business plan of past history, current operations, and potential for the future. In this BizBen Discussion several advisors and intermediaries weigh in.

Is There Such A Thing As Paying Too Little When Buying A Small Business?

We all understand the idea of paying too much for a small business. But is there such a thing as not paying enough? That seems like an odd notion, but I'm familiar with situations in which a buyer acquired a small business for a figure substantially under what probably was market value.

How Many Months Should I List My Business With A Business Broker?

It's important to remember that selling a business takes time. Unlike selling a house, which can be sold relatively fast, a business can take up to six months to a year to sell. Joe Ranieri (Orange County Business Broker) at 714-292-5448 explores this topic from a Business Brokers perspective.


Tim Cunha Business Brokerage
Escrow Services Diane Boudreau-Tschetter
Jim Thomas Broker Consultant Fitness
Chris Lazurik Business Broker
Facebook
Twitter
Linkedin
Vlogs and Podcasts
Advertise On BizBen
New Postings Reports On BizBen Sign Up
Instant Email Alerts On BizBen
BizBen ProSell Program
California Educational Events Buying And Selling Businesses
BizBen Blogs And Articles


BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved



Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Selling Your Business To One Of Your Employees - A Good Idea? Pros And C...
Read More News
Is There Such A Thing As Paying Too Little When Buying A Small Business?...
Read More News