We frequently receive inquiries from small-business owners about conducting business under a name other than its legal name. A business entity may conduct business in New Jersey under an alternate name (commonly referred to as a “fictitious name”) if statutory guidelines are met. An alternate name must be registered with the New Jersey Department of the Treasury’s Division of Revenue and Enterprise Services. Additionally, an alternate name must not be used as a means of deception of the business’s identity.
Pursuant to New Jersey Statute § 14A:2-2.1(2), a certificate or registration of a corporate alternate name must set forth the name, jurisdiction and date of incorporation of the corporation, the alternate name, a brief statement of the character or nature of the business to be conducted using the alternate name, that the corporation intends to use the alternate name in New Jersey, and that the corporation has not previously used the alternate name in the state of New Jersey. Pursuant to New Jersey Statute § 42:2C-9, a limited liability company (“LLC”) may adopt and operate under an alternate name if it follows procedures similar to those set forth above for corporations.
Although registration of an alternate name does not provide exclusive rights to its usage, it will legally link the alternate name to the entity and enable the entity to use the alternate name for financial, advertising and other business purposes. New Jersey does not limit the number of alternate names an entity may possess. An alternate name remains valid for five years after it is registered in New Jersey and an alternate name may be renewed for successive five-year periods by filing a certificate of renewal with the Secretary of State.
If an entity fails to file a certificate of registration or renew an alternate name, it will not impair the validity of any contract or act of the entity and it will not prevent the entity from defending any action or proceeding in any New Jersey court but no entity may commence an action or proceeding in a New Jersey court that arises out of a contract or act in which it used an alternate name until it has filed a certificate of registration or renewal. An entity that conducts business under an alternate name but fails to submit a certificate of registration of an alternate name may be subject to substantial fines and potential civil liability against an entity that is legally using a similar name.
Using an alternate or fictitious name provides flexibility to an existing business entity in addition to creative marketing freedom. Before operating under an alternate name, business owners should consult with an attorney to gain an understanding of the rights and liabilities potentially implicated by an alternate or fictitious name.
Michael Salad is a partner in Cooper Levenson’s Business & Tax practice group. He concentrates his practice on estate and asset protection planning, special needs planning, business transactions, mergers and acquisitions, tax matters and probate. Michael holds an LL.M. in Estate Planning and Elder Law. Michael is licensed to practice law in New Jersey, Florida, Pennsylvania, New York, Maryland and the District of Columbia. Michael may be reached at (609) 572-7616 or via e-mail at firstname.lastname@example.org
Craig Panholzer is an associate in Cooper Levenson’s Business & Tax practice group in its Florida office. He concentrates his practice on business transactions, bankruptcy, estate planning, probate and tax matters. Craig may be reached at (954) 889-1856 or via e-mail at email@example.com