The selection of a business name is one of the first decisions made by an entrepreneur.
Legal Advisors Goal-
1. Procure rights to for the client’s business
2. Help client avoid infringing on some other business or person’s name rights.
WHY CONDUCT NAME SEARCHES-
To confirm name availability;
Make sure you are not infringing someone else’s name;
Actual registration post availability;
As a result of various registrations etc. – protection of the name;
A new business should avoid any name that can give rise to the likelihood of confusion;
A subpart of the aforementioned name selection/ protection process,( which we are going to focus on today), is what is styled the fictitious name.
The focus here is the fictitious business name statute (law) , Business and Professional Code Section 17900 through 17930, of the California Statutes.
WHAT IS A FICTITIOUS NAME?
A fictitious business name is defined as follows:
For an individual it is a name that does not include the individual’s surname, or one suggests the existence of additional owners. B & P Code 17900(b)(1).
For Corporations fictitious business name would be something that is any other name other than stated in the Articles.
For General Partnerships it would be a partnership that includes names other than the General Partners.
For Limited Partnerships it would be any name other than the name on the Certificate of Limited Partnership.
For LLC’s it would be any name other than the name stated in the Articles of Organization.
WHAT ARE THE FILING REQUIREMENTS?
Every person who regularly transacts business in the State of California for profit under a fictitious business name, must file a fictitious name statement B & P Code 17910.
The filing must be filed by mail or in person with the county clerk, or county clerk recorder where the entity has its principal place of business in CA within forty (40) days of first conducting business under the fictitious business name.
Registrant must sign the statement and when it is filed, either registrant or the agent filing on his/her behalf must present personal identification to the county clerk.
There is a fee, which is continually changing but today it is about $17. In San Diego County;
Once filed with the county clerk, the fictitious business name must be published in a newspaper of general circulation of that county within thirty (30) days of filing the statement.
The newspaper should be one that circulates in the area where the business will be conducted;
Advertisement must be published once a week for four consecutive weeks with five days between each date of publication,
an affidavit of publication must then be filed with the county clerk within 30 days after completion of the publication. B & P Code 17917 (d).
FICTITIOUS NAME FUNDAMENTALS VS FUNDEMENTALS OF TRADE NAMES.
The fictitious business name act 17900 through 17930 interacts with the B & P code sections related to trade names, In particular B&P Code 14411 which provides a fictitious business name registrant, enjoys a rebuttable presumption of exclusive right to use its fictitious business as a trade name in a county in which is registration statement name was filed, provided that it was the first to file in that county and is actually engaged in a trade or business using the fictitious business name in the county.
HORRENDOUS EFFECTS OF NON-COMPLIANCE
A person who has not filed a fictitious business name statement may not sue on a contract made, or a transaction engaged in under the fictitious business name B&P Code 17918.
Further, even though you cannot sue, you can in fact be sued under your fictitious name.
IF YOU COMPLY WHAT DO YOU HAVE?
PRIORITIES AND CONFLICTING USE OF NAMES
Filing a fictitious business name statement by a person required to file under B&P Code 17910 establishes a rebuttal presumption that the registrant has an exclusive right to use the fictitious business name as a trade name in the county were the statement is filed if the registrant is the first to file a statement and is actually engaged in the trade or business …
WHAT ABOUT IF I HAVE FILED A ‘FICTITIOUS NAME THROUGH THE FILING OF MY ARTICLES OF INCORPORATION?
Filing articles of incorporation (although not really filing under the fictitious names statutes) establishes a rebuttable presumption that the corporation has the exclusive right to use the corporate name in California as set forth in the Articles of Incorporation so long as the filing of the Articles is the first to occur AND the corporation is actually engaged in the trade or business.
So, if I file Articles of Inc. ( or LLC etc) with a name- does that necessarily give me priority on that name Statewide?
It gives you a rebuttable presumption in your favor;
What if John has filed a Fictitious Business name – same name in San Diego County – and it was filed , and the business was operating prior to the filing of the Articles of Incorporation?
Well, at least as to San Diego County John was first in time- he trumps the Corporate filing;
Depending upon where the Corp. is going to do business, i.e. how close to San Diego, John will probably be able to get a Court order called an injunction stopping Corp. from using the name- in close geographical proximity to San Diego—much is determined by the facts;
What if there is yet another company using the same name as a trade name- who was doing business in San Diego County prior to John- but he never filed a fictitious name statement, but he was doing business under the name for many months and or years in San Diego County?
If the name John is using is confusingly similar, John will probably be stopped/ enjoined from using the same?
This rule would most likely apply even if simple common law trade name/ trademark (distinction- mark describes the product / trade name identified with the business) – law was applicable;
But , would be even stronger against John, notwithstanding his fictitious name filing , if in fact a State and or Federal Trademark registration had been processed.
Frustration in tracking of names/ use of the same/ No
Integration in Fic. Name Bureau; Secy of State’s office,- no integration , corps, LLC’s, Lp’s; LLps- etc—
Bottom line, depending upon the plans for the Business- only local vs National, all data bases should be checked-
Secy of States offices; Fic name Bureau; Teas Fed. TM system; same for State;
And depending upon the importance of the Branding’- independent searches , Nationally or Worldwide-
Money in the bank;
Minimum—Teas; State Tm registrar; Secy of States office across all entities; local Fic. Name Bureau;
That Approach will at least give you and your business a fighting chance.