No matter how much we research and plan, life is constantly evolving. Changes in trends, advancements in technology, increases in consumer demand or even transitions in your personal life can influence how we run our company. These factors may have caused you to choose one name for your business in the beginning, but now the original name may not really fit your image or what you have to offer anymore. Regardless of your reasons for changing your business name, the process is simple and easy to accomplish.
How to Change the Name of Your LLC
If you currently have a Limited Liability Company (LLC), all you need to do is mark the appropriate name change box of the Form 1120 (Form 1120: Page 1, Line E, Box OR Form 1120S: Page 1, Line H, Box 2) when you file your tax return. If you’ve already filed your return for the current year, contact the IRS at the address where you filed your return and make sure that the notification is signed by a corporate officer.
Do I Need a New EIN If I Change My Business Name?
An Employer Identification Number (EIN) is like a social security number that the IRS gives to your specific company to identify your business for the following reasons:
- You have employees working for you and you need to fill out W9 forms
- You own a partnership or corporation
- You file any of the following tax returns: Employment, Excise or Alcohol, Tobacco and Firearms
- You have a Keogh or Solo 401(k) retirement plan
- You wish to open a bank account for your business that isn’t linked to your personal accounts
According to the IRS, you will need to apply for a new EIN if you change your entity type, if you become a subsidiary of a parent company or if you are a part of a statutory merger. You will not be required to obtain a new EIN for a corporate name or location change.
For example, let’s say you and your friend Bob are co-owners (called “members” in an LLC) of The Pizza Shack. You both agree that it’s time to create a more upscale image to attract additional customers. You decide that the first part of this process is to rename The Pizza Shack to Molto Bene Pizzaria. You do not need to get a new EIN, but you will need to change the name on your tax return to alert the IRS of this new information.
5 Tips for Renaming Your LLC
There are many great reasons why you may want to change your business name. Maybe one of the key members of your LLC is no longer part of the business, and their name was in the business name (like Ben and Jen’s Ice Cream Shop). Perhaps you had an e-commerce jewelry boutique, and now you realize you should just specialize in custom bridal jewelry. Regardless of the reason for changing your name, here are some important tips to consider:
1. Don’t Limit Yourself
In the previous example concerning custom bridal jewelry, you may think “Lisa’s Custom Bridal Jewelry” is a great name that helps customers instantly identify exactly what you have to offer. However, let’s say this market takes off and there are thousands of custom bridal jewelers that pop onto the scene. You may need to adjust your product to reach a broader audience, so “Lisa’s Custom Creations” might be a better long-term fit.
2. Don’t Make It Overly Complicated
In a world competing for URLs and trademarks, it can be tempting to spell something in a unique way to get the web address you’re hoping for or stand out in the crowd. Unfortunately, this can make your name harder to pronounce or remember. For example, “Lisa’s Custom Creations” is easier to spell and remember than “Custom Brydal Jewelry.”
3. Consider the Big Picture
While changing your name is easy, changing your branding and image might not be. When you change your name, you could run the risk of losing existing customers, compromising your current reputation and getting negative feedback on your new direction.
Think about the customers you want to reach, a logo that could accompany your new name and the image you want to project before getting feedback from those close to you. You only want to go through this process once (otherwise your business could seem fickle and unstable), so think about the changes carefully.
4. Give It a Positive Spin
When SEOmoz changed their name to Moz in an effort to rebrand and shed the restrictive SEO label, they wanted a company name that would reflect that. Entrepreneurial blog Grasshopper explains it like this: “Not only did Moz make the change, but they launched a new product at the same time, and detailed their reasoning in a lengthy blog post by the CEO. The new product coupled with the transparent reasoning helped Moz to gain ground when they made the change, rather than lose it.”
Once you choose your business name, do you have to add “LLC” to the end of it? Well, it is a good thing to have LLC at the end of your name for a couple of reasons: It shows that you are a real company registered with the secretary of state, and it announces that your personal assets are protected if someone wants to sue your company.
However, what if you don’t like the look of Lisa’s Custom Creations, LLC? You can file a DBA (doing business as) form, which is also called a “fictitious business name.” This allows you to drop the LLC part of your business name for everyday use.
Are you still not sure if you want to add LLC to your name, or if this entity is even right for you? Contact Incfile today. Our experts can guide you through the process of determining what type of entity is best for managing your company as your business evolves.
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