The Complete Guide to Fictitious Names in Florida
In the State of Florida, the Fictitious Name Registration Act requires all business operating under a name besides the legal name of the owner or owners to register with the Division of Corporations before conducting business under a different name. Please read through this guide to answer any questions and to read an explanation of some of the tenants of this act and what they mean for your new or growing business.
What is a Fictitious Name?
A fictitious name is, according to the Florida Department of State, Division of Corporations, “any name under which a person transacts business in [the state of Florida], other than his [or her] legal name.” The most common usage for a fictitious name is a corporation name because it exists as an entity outside of the individuals who work there or own it. The advantages of using such a name are rooted in the fact that it makes business or commercial exchanges that much easier. For example, when a person makes a payment at a store, other than cash, they make the check out to or the charge on a card is made to the business name rather the individual tender. The same concept applies for corporations using such a name to hold a bank account or make return payments of their own.
This is just one use of a fictitious name however, as the concept extends to all facets of business. In the state of Florida, business is defined as “any enterprise or venture in which a person sells, buys, exchanges, barters, deals, or represents the dealing in any thing or article of value, or renders services for compensation.” This means that even individuals who do not own a corporation may elect to register a fictitious name if they feel it would be best suited to their practice. A writer who uses a pen name for example may use a registered fictitious name rather than their legal name for payment purposes.
Other examples of fictitious names might include trademarks, limited partnerships, or service marks. Note however that an assumed name of this kind must be registered with the state of Florida in order to be considered a valid fictitious name. A person cannot simply make up a business name and it be considered valid for monetary exchange. However, any acceptable name is valid once registered. There are numerous benefits to doing so, and it is usually recommended as a good business practice.
When Would the Division of Corporations not Require the Filing of a Fictitious Name?
Although it is usually a good idea to register a fictitious name, and is normally required for the legal usage of such a name, this is not always the case. There are a few scenarios where the filing of a fictitious name would not be required by law. The first would be if the person who is applying for a name is a licensed attorney forming a business for the practice of law within the state of Florida. This is only is a hard and fast rule however if it is an individual opening a law firm however and not necessarily a partnership of multiple attorneys.
An applicant also need not register for a fictitious name is he or she is already registered with the Department of Business and Professional Regulation. This exception would not apply, however, if their licensing board has exclusively mandated such a registration, in which case it would be required anyways. Obviously, if the entity applying is already a registered corporation or partnership that is in good standing with the Division of Corporations, they do not need to apply again unless they are planning to conduct business under a different name, in which case that name would need to be registered and associated with the already existing name.
A final, generic exception to file for a fictitious name would be if the entity applying is a federally chartered corporation. The logic behind this is that if the name is already registered on the federal level, it does not need to be registered on a state level. Again, this would not be the case however if such an entity was aiming to conduct business under an additional name, in which case the additional name would need to be registered either federally or with the state of Florida.
There may, of course, be other exceptions to filing for a fictitious name, however any additional circumstances would need to be handled on a case by case basis. If there is any doubt as to whether you should apply, it would be a good idea to do so or ask the State.
What is the Intent of the Fictitious Name Registration Act?
The Fictitious Name Registration Act, placed into effect this year, requires all businesses that are using a fictitious name to register it before conducting business under that name. Under the act, the desired name, mailing address of the business or entity, and the legal names and addresses of each owner must be registered. If it is a corporation that is taking on the fictitious name, then the federal employer’s identification number and Florida incorporation or registration number must also be noted. In addition, the person or persons applying must certify that they have advertised the intention to register their fictitious name in at least one newspaper in the county where the business will be conducted, and provide any other necessary information to the public or government agencies.
The intention behind the Fictitious Name Registration Act is primarily to place on record the various names that individuals and corporations use to conduct business in this state. However, the other main objective is to notify the public as to these business names and who owns them. With fictitious names now being registered, they become public knowledge and thus bolster the company’s presence in their respective county and the state. That is why there is a requirement to advertise the fictitious name before it is registered. In this way, a new company or business will already have somewhat of a community presence, which increases its chances of surviving in the longer run. It also shows the dedicated intent to cultivate a business by not only making it an official name, but also presenting it to the community.
To further help business owners, particularly small business owners, promote their business, there is a requirement to renew the name every five years. This helps keep the business in the public eye and also helps keep the records up to date. Although not all businesses have to register their fictitious names, it is a boost to solidifying new and thriving companies and keeping their names alive for years.
What is the Effect of Registration?
Contrary to what it may seem on the surface, the primary effect of registering under the Fictitious Name Registration Act is not merely to set into stone the name used by a business, corporation, or partnership. Rather, the main effect of registration is to public notice only. What does this mean? It means that registering a name places it in the public eye, gives widespread recognition to it, and even provides minor marketing for the fledgling business. This is a big aid to small, home-owned businesses or rookie entrepreneurs starting out, as it gives them a level of credibility and official standing. Registration also guarantees that business can be conducted uninterrupted, barring any additional legal complications of course, in the State of Florida, which allows the registrants to focus on building their business and not worry about naming problems.
To clear up any confusion, there are a few things that registering a fictitious name with the State of Florida does not guarantee or protect the name owner from. There should be no presumption here that the person or persons registering the fictitious name have a right to own or use it. In other words, if they would not have the ability to through other means, this Act does not grant it. In addition, registering a fictitious name this way has no bearing or effect on trademarks, service marks, any names that were previously used or acquired through trade or business transactions, or any similar-sounding names. In fact, the registration of a fictitious name does not necessarily guarantee that it won’t be able to be used in the future by a separate party, especially once the registration time period, which is five years, is over. If that is the goal, then one would be better suited getting a trademark, copyright, or patent instead. Similar sounding names are not protected as well. Two different individuals can register a similar or nearly identical name under this Act, so one should be aware of this when registering and executing subsequent marketing plans.
How do I know if I am Exempt from Filing?
There are a few situations for different individuals in which you would not be required to file for a registered fictitious name. Generally, there are specific professions in which a fictitious name would not be required if the business is merely an individual who is opening an office to practice his or her profession. These instances include an attorney who is licensed to practice law in the State of Florida or anyone who is licensed by the Department of Business and Professional Regulation or by the Department of Health. This, of course, does not include any collaboration or partnerships of such members. For example, two lawyers opening a partnered firm would still need to register the partnership’s name under the Fictitious Name Registration Act. This exception does also not include any business that would be considered ancillary, such as projects that are beyond the scope of the profession, as they would be considered separate business and therefore not covered under the exception name.
Your business may also be exempt from filing under the Fictitious Name Registration Act if it is already a federally chartered corporation. For the most part, a business or name registered on the federal level need not apply again under the state level. In addition if the corporation is already registered and in good standing with the Florida Department of Business and Professional Regulation or their Division of Corporations, then a fictitious name need not be registered again under this Act.
There are of course other exceptions that may arise as to why an individual or individuals would not need to register their fictitious name or names, however these would be handled on a case by case basis. If there is any doubt as to whether you should file, it would probably be best to do so. If there are any questions or “gray areas” and you are unsure as well, you could consult with the helpful advice of the Hardee County Economic Development Council or contact the Florida Department of Business and Professional Regulation directly.
What are the Penalties for Failure to File a Fictitious Name Registration?
If a person or persons fails to register their fictitious name, they may not conduct any business under that name under the registration is completed and confirmed. If the business does execute any transaction, they are in violation of the act and can be penalized accordingly. The Fictitious Name Registration Act outlines three tenants of penalty that accrue if a violation does occur.
Firstly, the entity may not continue to conduct business under the fictitious name until it is registered. This includes taking any action, suit, or proceeding in any court in the State of Florida. This is not necessarily lock the business out of participating in a court of law, but rather requires that they complete their registration and comply with the Act before proceeding. This of course can be easily avoided by filing in the first place.
This being said, the Fictitious Name Registration Act also states that “The failure of a business to comply with this section does not impair the validity of any contract, deed, mortgage, security interest, lien, or act of such business and does not prevent such business from defending any action, suit, or proceeding in any court of this state.” This means that the legitimacy of the case or anything presented in it is not hindered by a violation, as well as confirms that the case can proceed without unnecessary gridlock. However, the Act also states that the violating business may incur the penalty of having to forfeit reasonable attorney’s fees and court costs tallied up by the State during the case.
Ultimately, the Fictitious Name Registration Act declares that the violation of it is a second degree misdemeanor. Under Florida law, the penalty for a crime under this category is a fine of $500, as well as a definite term of imprisonment that is no longer than 60 days. Such sentencing also goes on record, so it is best to avoid complications like this if at all possible to prevent a stain on the reputation of you as an individual or the new business you are trying to start or grow.
What Proof will I need of my Fictitious Name Registration?
For most places of business using a fictitious name, the owner of it will need to provide proof of registration before conducting business under this name. This is always the case for banks and financial institutions, such as credit unions. If your business switches the primary county it operates in, the owner may also need to present proof of registration to the county of municipality that has jurisdiction in that area.
There are two kinds of proof for a fictitious name registration, but the owner legally only needs one of them. The first is a copy of the owner’s current registration forms. This is presented to the owner of the name by the Division of Corporations of the Department of the State at the time of the form’s approval. You may however request these papers again if they are lost, although this will come at a nominal fee. This is the most common form of proof and the easiest to obtain.
The second kind is a written statement, which must be signed by the owner and notarized, that lays out the reason that the person does not need to comply with the Fictitious Name Registration Act. If you fall under any of the exceptions for not registering a fictitious name, then this letter will prove that this is indeed the case and prevent you from drawing a penalty for not having one. This is more so the exception than the rule, but it may apply depending on the individual’s circumstances.
Having proof of your fictitious name is important whether you have one or are operating in a business in which you do not need one because it protects you from being penalized. Since the penalties can be high, you do not want to endanger your new or growing business by an easy mistake like not having proof of registration. Again, should you lose any paperwork, you can request new ones of your current registration from the State, which is recommended to prevent future problems.
What is the Fee to File?
When you file for your fictitious name with the State of Florida, there are a number of fees that are outlined by the Fictitious Name Registration Act. The first and only mandatory one is a one-time fee of fifty dollars. This is a non-refundable processing fee required to complete the registration of your fictitious name. If you would like to cancel and reregister a fictitious name, then there is another fee of fifty dollars, non-refundable, that does not stack with the previous one. After you’ve registered a name the first time, it will need to be renewed at the end of the term and reregistered. This will incur another processing fee of fifty dollars.
After you’ve filed and the entire time that your registration is valid, you may request additional copies of your registration forms. This usually happens when the owner or owners of the fictitious name lose the paperwork necessary to provide proof of registration. For an additional copy of the registration documents, a fee of thirty dollars is assessed. For any additional certificates of status, which merely indicate the state of the name, a ten dollar fee is charged. Though the fees may seem unnecessary, please remember that the penalties for not filing are much more severe, so it is prudent to replace the documents should they be lost.
Initial and additional copies of the registration documentation may be sent to the owner of the fictitious name via either e-mail or regular mail, depending on personal preference. There is no additional fee or discount for choosing one medium over another.
How Long is the Fictitious Name Registration Good/Valid for?
Although filing for a fictitious name in the State of Florida is a requirement (except in certain circumstances), it is not permanent. After an initial registration of the fictitious name, it is valid and active for a period of five years. However, the name will not expire until December 31st, the last day of the year, of the final year.
Depending on when you register then, it is possible that the name remain valid for an additional period of time. For example, if you were to apply on November 1st, 2016, the name would not expire on November 1st 2021, it would expire instead on December 31st 2021. This essentially grants you an “extra” month or so of the fictitious name being valid. This is useful to keep track of in order to make the most of your fictitious name registration, however, this need not influence your decision as to when you should register the name; the name should be registered as soon as it is relevant for transacting business and before any business is undergone.
When it comes time for you to reregister your business or partnership’s fictitious name, the Florida Division of Corporations will send you a renewal application via mail at least three months before the December expiration date. This not only serves as a reminder to you that the time of registration is fast approaching, but is also convenient because you do not need to go out of your way to find the renewal form. Since the form is sent to the current address that is on file for the business’s fictitious name, it is important to make sure that the address for the business, and really all important and contact information for it, is up to date to reduce the risk of the form getting lost in the mail. If you need to update the address for the business operating under the fictitious name, a letter or other form of written communication must be sent to the Florida Division of Corporations; simply e-mailing a change of address request will not suffice.
What is the Division of Corporations’ Responsibility?
While the Florida Division of Corporations oversees many business administrative tasks for the state, in this context it is responsible for administering all of the Fictitious Name Registration Act’s statues. It is also up to this agency to ensure that all of the processing of registration documents is done smoothly and effectively and to ensure that any penalties are brought to the attention of relevant law enforcement agencies. While the Division of Corporations does an excellent job of overseeing these tasks, it is not responsible for everything when it comes to filing for a fictitious name.
It is the responsibility of the applicant to comply with all of the requirements of the Fictitious Name Registration Act and turn in all paperwork necessary in a timely and relevant manner. It is also up to the applicant to know when they need to file or if they don’t need to file. For example, if a different branch of the State government requires a fictitious name even though the Division of Corporations does not, then it must still be filed and filed correctly. It is also the applicant’s responsibility to ensure that all information written down and submitted is accurate and legible.
Selecting the fictitious name and making sure that it is an appropriate name is also a task the prospective owner of the name is responsible for. Under the Act, no name may contain the words “Corporation,” “Incorporated,” or either of their acronyms (Corp. and Inc. respectively) unless the owner is in fact a recognized corporation and has the authority to label themselves as such. It is an easy mistake to make if the owner wants one of these names or the name of a fictitious name that already exists in this state. For this reason, a bit of research ahead of time is a good idea.
Since the Division of Corporations does also not offer any legal or any other kind of advice, seeking one’s own counsel is recommended. Starting or growing a new business can be a daunting process and if there is any confusion about filing for a fictitious name, processing forms, or anything related, we at the Hardee County Economic Development Council are here to assist you in any way we can. Please consult with us by calling 863-773-3030 and we’ll help you make a name for yourself, both in legal documentation and in the community.