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 names are one type of business name that can get a bit confusing. So if you’re wondering what an assumed 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 Illinois assumed names so you don’t have to sort through the legal jargon and focus on what really counts: your business.
Important Tip
What is an Idaho Assumed Name?
An assumed name—often called a DBA or fictitious name or trade 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 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 name. Because of this scenario, assumed names are most commonly used by unincorporated entities.
That said, many corporations and LLCs also choose to use assumed 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 name for it. Corporations might do something similar for new product lines, too.
But that’s assumed names in a nutshell!
Is assumed name registration required in Illinois?
In Illinois, you are required to register an assumed name if you intend to use one. But in Illinois, technically more than one business in the state can use the same assumed business name. So registering it doesn’t necessarily give you any specific legal protections, but since it’s legally required, registration is well worth your time.
That said, exactly how you register your assumed name depends on your business type. LLCs and corporations (and other registered entities) register their assumed names with the Secretary of State, but unincorporated entities like sole proprietorships will register with their local county clerk.
Benefits to Registering an Illinois Assumed Name
There are several benefits to registering an assumed name. Most importantly, registering ensures that you comply with state law. But one benefit you might not expect at first is the fact that registering your name adds it to the public record. That keeps the public aware of the identity of who is doing business under a given name, and transparency is important when running a business. Plus, even though the state doesn’t protect assumed names for exclusive use, other businesses might see your name is registered and decide to tweak theirs in order to be unique themselves.
Another unexpected benefit is that an assumed 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 name gives your customers peace of mind. It’s not uncommon for customers to write checks, right? Without an assumed name, 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 name gives your business an extra layer of legitimacy.
Register your Illinois Assumed Name in 4 Steps
1. Check that your assumed name doesn’t infringe on any legally protected names.
Before you register an assumed 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 Illinois
- Names that have been reserved for future use by incorporated entities
- Names that are protected by U.S. trademark law
The Illinois Secretary of State (or local county clerk) will automatically reject your assumed 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 Corporation/LLC Search. This is your way to check the state database for any exact matches to your assumed 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 Corporation/LLC 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 Corporation/LLC 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 Illinois. 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 name application.
In Illinois, the process of registering your assumed name is relatively simple. For starters, you’ll need to file the Assumed Name Adoption form. But this form only applies for registered entities. If you’re a sole proprietorship or similar entity, then you’ll need to register it with your local county clerk instead. And if you operate in more than one county, you need to register in each.
Unincorporated entities will need to pay the filing fee required by their county, but incorporated entities will pay a $150 filing fee (plus a small fee if you opt to file online). Once you complete that, your name is on file with the state.
3. Publish notice of your assumed name.
Once you’ve filed your certificate for your assumed name, you’ll need to “advertise” that you’ve filed that name. More specifically, you need to publish notice in a local paper (more specifically your county). Essentially, you’ll pay for an ad that tells your local customers who you are, what you do, and the business name you’ll be operating under.
Illinois requires you to submit the first ad within 15 days of filing your name. After that, you need to publish this notice at least once a week for three weeks. If you’d like, you can make that publication more frequently (or in more than one paper), but that’s up to you and your budget.
4. Renew your assumed name.
In some states, an assumed name registration lasts forever. But in Illinois, your assumed name registration lasts for five years.Before that five-year period expires, you’ll need to file a renewal. This procedure looks much like the initial registration: unincorporated entities renew with their county clerk (and pay their clerk’s filing fee), and incorporated entities file with the Secretary of State and pay the $150 renewal fee. Once that’s complete, your name is good to go for another five years.
Other Considerations for Your Assumed Name
Now that you’re a proud owner of an Illinois assumed name, there are a couple things to keep in mind.
Most importantly, you should note that an assumed 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 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 name for those protections.
Next, keep in mind that registering an assumed 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 Illinois, you’ll follow Illinois law and federal (national) law for businesses. Indiana, for example, has no jurisdiction over your business unless you choose to expand into Indiana. This affects business names, too.
If you want to protect your assumed name or legal name outside of Illinois, 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 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, paying the filing fee, and publishing a notice in a local payment. Hopefully this guide has taken away some of the guesswork to Illinois assumed names.
If you decide that forming an actual entity is right for you, we recommend forming an Illinois LLC for most small businesses and entrepreneurs. You can either register it yourself or hire an IL LLC filing service.