There are dozens of decisions to make when you start a business, but one of the most important ones is your business name. Some might even say that it’s harder than naming a baby. After all, the government doesn’t give “rules” about what you can name your children. They do give rules for business names.
Thanks to those legal regulations, assumed business names are one type of business name that can get a bit confusing. So if you’re wondering what an assumed business name is, if you need one, or how you can get one, you’re in the right place. In this guide, we’ll cover all the essentials to Montana assumed business names so you don’t have to sort through the legal jargon and focus on what really counts: your business.
Important Tip
What is a Montana Assumed Business Name?
An assumed business name—often called a DBA or trade name or fictitious name—is a type of business name. More specifically, it’s a fake name used by a business, much like you might use a nickname around family and friends.
A bit more technically, an assumed business name differs from the business’s legal name. Here’s where it becomes important to note what kind of entity you’re running.
For example, let’s say Lauren Smith operates as a sole proprietorship. From a legal standpoint, her business is indistinct from her own person. So her business’s legal name is, well…Lauren Smith. Not many people want to call their business by their own name.
Lauren sells handmade baby clothes, so she decides to name her shop “Sew Sweet Creations.” Unless she incorporates as an LLC or corporation, she’d be using an assumed business name. Because of this scenario, assumed business names are most commonly used by unincorporated entities.
That said, many corporations and LLCs also choose to use assumed business names. For example, a local restaurant, “Becky’s Bistro,” might want to expand across their county, with a slightly different name for each location. Instead of creating a new LLC for the new locations, Becky might get an assumed business name for it. Corporations might do something similar for new product lines, too.
But that’s assumed business names in a nutshell!
Is assumed business name registration required in Montana?
Montana is even pickier than most states when it comes to registration requirements for assumed business names. If your assumed name is in any way different from your business’s legal name—even if it adds onto but includes your full legal name—you must register it. This applies to all entity types, too.
Technically speaking, you don’t “own” an assumed business name after you register it. But Montana requires all business names on record to be distinguishable from each other. Registering adds your name to the state record, so other entrepreneurs in Montana won’t be able to register the same one. Even if Montana didn’t require registration, we’d recommend filing the name for that reason alone.
Benefits to Registering a Montana Assumed Business Name
There are several benefits to registering your assumed business name. Like we’ve just mentioned, one of the biggest benefits is that you’ll prevent others from using the name you’ve chosen. This doesn’t apply to businesses in other states, of course, but while you’re just starting out, there’s a lot of peace of mind knowing that no one else in Montana has a name like yours. And as an added plus, putting the name on public record ensures that everyone is aware of who’s doing business under a given name.
One benefit you might not think of right away is that an assumed business name allows you to get a business bank account in that name. This isn’t a necessity for many entrepreneurs, but from an accounting standpoint, it’s really helpful. You can keep all your “business funds” in one place, separate from your personal funds. That’s a good habit to start from the get-go (especially if you ever intend to become an incorporated entity later).
On a similar note, an assumed business name gives your customers peace of mind. It’s not uncommon for customers to write checks, right? Without an assumed business, they’d write the check to you personally. Some people are leery about that. But thanks to a business bank account, Lauren can tell her customers to make their checks out to “Sew Sweet Creations.” It’s just a psychological thing, but an assumed business name gives your business an extra layer of legitimacy.
Register your Montana Assumed Business Name in 3 Steps
1. Check that your assumed business name doesn’t infringe on any legally protected names.
Before you register an assumed business name, you have to do your homework to ensure that you actually have clearance to use that name. Here are a few of the names you cannot use:
- Names that are already in use as the legal names of any corporations, LLCs, and other protected entities in Montana
- Names that have already been registered as assumed business names in Montana
- Names that have been reserved for future use as legal names for corporations or LLCs
- Names that are protected by U.S. trademark law
The Montana Secretary of State will automatically reject your assumed business name if it infringes on other names registered in the state. They won’t check the U.S. Patent and Trademark Office’s database for you. That’s why it’s important to complete a few different searches.
First, you’ll need to run a Montana Business Search. This is your way to check the state database for any exact matches to your assumed business name. As a general rule, if you search your desired assumed name and the tool pulls up any matches, you’ll need to change your name.
Resource: Need help with the Montana Business Search? Check out our full name search guide here.
Next, we recommend searching the U.S. Patent and Trademark Office’s trademark database. Even though trademarks are usually regarded as visuals or logos, any names and text included within those visuals are nationally protected. That means no other names or visuals in the entire United States can’t be the same or similar as a trademarked name.
There are plenty of examples of different small businesses being taken to court for infringing on the name of large international chains, but we won’t get into them. Just rest assured that you’ll be doing yourself a big favor by ensuring that your name is completely unique.
Another optional search is just your tried-and-true Google search. This won’t give you any systematic, organized results like what you’d get from the Montana Business Search. But it will give you insight into names being used everywhere.
For example, you might find that your desired name is being used by another business in a neighboring state. That’s fine as long as the name isn’t trademarked and you intend to run business exclusively in Montana. But if you have any aspirations of expanding into other states, you’ll want to know what names are in use there.
2. File the appropriate assumed business name application.
In Montana, the actual process of registering your assumed name is pretty simple. For starters, you’ll log into Montana’s ePass portal. If you’ve previously filed forms with the Secretary of State, you probably already have a login. If not, you can easily sign up for one.
Once you log in, you can file an assumed business name application. The form will ask for some basic information about your business, plus the name you’re hoping to register. Near the end of the process, you’ll be asked to pay a $20 filing fee, so be sure to have a credit or debit card on hand. After that, your assumed business name is ready to go.
3. Renew your assumed business name.
In some states, an assumed business name lasts forever. But in Montana, your registration is good for five years. If you intend to continue using the assumed business name, you’ll need to file a renewal before the five-year period expires.
The renewal process looks a lot like the initial registration: you’ll log into ePass, and the renewal fee is still $20. There isn’t a huge penalty if you don’t renew in time, but an expired registration technically makes your name available again, putting it up for grabs. While unlikely, someone could register the name out from under you. Thankfully, you can avoid that problem easily by submitting your renewal on time.
Other Considerations for Your Assumed Business Name
Now that you’re a proud owner of a Montana assumed business name, there are a couple things to keep in mind.
Most importantly, you should note that an assumed business name does not give you any personal asset protection. That’s a perk that comes with incorporating your business, such as forming an LLC or corporation.
If you already are (or you’re thinking about forming) an LLC or a corporation, then you get personal asset protection and even privacy through a registered agent service. This means that if something ever goes wrong with your business, your personal belongings—your car, your house, your personal savings account—are protected. Creditors or legal plaintiffs cannot touch them.
That protection is not available to unincorporated entities like partnerships or sole proprietorships. Moreover, applying for an assumed business name does not grant you that protection. In these cases, if something went wrong with your business, you’d have to pay any debts out of personal funds. So please don’t rely on an assumed business name for those protections.
Next, keep in mind that registering an assumed business name doesn’t prevent businesses in other states from using that name. The same applies for business’s legal names, too. We won’t get too technical with this, but each state governs its own businesses with no effect on businesses in other states. So as a businessperson in Montana, you’ll follow Montana law and federal (national) law for businesses. Wyoming, for example, has no jurisdiction over your business unless you choose to expand into Wyoming. This affects business names, too.
If you want to protect your assumed business name or legal name outside of Montana, you do have options. Foremost among them is applying for a trademark with USPTO. If that’s something you’re interested in, we recommend seeking additional legal counsel. Trademarks are a very complicated (and expensive) process, and a lawyer will help you conquer every aspect of the application.
Conclusion
Important Tip
Assumed Business Names might sound a bit complicated, but they don’t have to be. As long as you follow the proper state guidelines, it’s actually as simple as filling out the form online and paying the filing fee. Hopefully this guide has taken away some of the guesswork to Montana Assumed Business Names.
If you decide that forming an actual entity is right for you, we recommend forming a Montana LLC for most small businesses and entrepreneurs. You can either register it yourself or hire an LLC service.