What are the legal and other consequences of changing the name of a S corporation?
I currently have an S corporation in Massachusetts.
I have a few patents assigned to the S corporation in Massachusetts.
The present company name is totally inappropriate to attract customers. What are the legal and other consequences of changing the name of a S corporation to another name more appropriate to attract customer's attention. The taxes are all paid up. Everything is presently in order.
Or would I be better off just starting a new company?
The legal consequences are:
you will need to chnage the name on the finance department for tax purposes and you have aproximately 90 days to do so dependind on the region that you are in; you will also nees to change the name officially, on the company's registration department and if you have a license you will also need to change the name accordingly and any other activity if you wish to change it also.
You can also end your present activity and start a new one however this means that you will need to ask all the licenses from the start. I think it will be more expensive this way.
The decision is in your hands.
Rather than change it, why not simply file a fictitious name (DBA - Doing Business As). This is a way to legally use another name in place of your actual corporate name, without the hassle of a legal name change for the entity.
There should be no legal ramifications of an actual name change, though there would be some cost.
You need to check with:
1) a lawyer whose niche is business law
2) your state attorney generals office
I agree with the dba approach if your only concern is having a name that is more effective for marketing purposes. You still retain all legal rights of the corporation, can transact business (including accepting checks made out to either name, etc.,) and don't have to deal with two sets of books, two tax filings, Etc. Etc. Etc.
I have a dba for my own S-corp. Requirements vary by State, but in TX I just had to do a simple form filing with the SOS, then with the county in which my office is located and then with my bank. No muss, no fuss and no lawyer required.
This is an important time to seek legal counsel from the proper lawyer.
Francis: You are asking 2 different questions. From a legal and tax standpoint, the name change is of no significance as long as you keep the same FID number. The name change is easily accomplished by filing a resolution with the appropriate department in the state in which you are incorporated and then notification to each state in which you do business. The other costs are purely administrative (stationery, calling cards, marketing, etc.). The suggestion that you keep the current corp and use a dba has the same admin costs but less legal expense is valid except...... Regarding the patents, you already assigned the patents to your corp #1 which now owns those patents unless you arranged for some default provision to allow you to regain ownership. I suggest that you form a second corp as the operating company for your business and have corp #1 license the intellectual property to corp #2 in exchange for a royalty. Keep all of your developments in #1. You therefore retain control of the IP even if corp #2 fails. And yes, talk to an IP attorney. Good luck with your venture,
Hi - I am not the one to give you the answer you were looking for, but -- you may want to have the patents owned by the current company or by yourself, and start a new company with a name you prefer that would use the patents - perhaps pay the patent owner a royalty. Ask that question of a lawyer or CPA. That way if one company has unforeseen problems and goes bankrupt or gets sued, the other one might remain ok.
So are you a C Corp or LLC being taxed under IRS subchapter S? Why change the name when you can get a DBA. Some states it requires 15 minutes online at the secretary of state and 20 dollars or so. Other states like California it is costly and takes a while.
I would look into a DBA before ever changing the corporations name, imho. It will accomplish your goal without the pain of changing your name.