Choosing and registering a business name is one of the first steps in creating a business. However, choosing a name that may be protected by trademark or doing business under a different unregistered name may have the consequence of personal liability for business decisions.
For Michigan, one of the first steps in creating a business entity is registering a distinguishable name with the Department of Licensing and Regulatory Affairs (LARA) for Michigan. MCL 450.1212. Although a name may be available and considered discernable from others, simply by adding an “Inc.” at the end of an already registered name, trademark issues may arise. This is important, as the chosen name may not be available to do business under.
This could mean that you may want to use an assumed name to do business. An assumed name is one that allows doing business under a name that is different from the registered business name with LARA, or whichever state agency regulates that information. See MCL 450.1217. For Michigan, an assumed name certificate is required to be filed with LARA to enjoy the same limited liability benefits of doing business under the registered name.
If you do not file in Michigan, it can create personal liability for the person signing on behalf of the business. In Detroit Pure Milk Company v. Patterson, the court found that even though a longer version of the registered company name was used, it was considered a different company name. 138 Mich. App. 475, 478 (1984). Therefore, the agent was personally liable for the company contract made. Id. at 479. In everyday practice, it’s important to register an assumed name, even if you plan on just leaving the “Inc.” off the official, licensed name.
For Michigan, it is important to file an assumed name certificate to enjoy the full benefits of the limited liability a registered company has. However, each jurisdiction has their own rules and requirements, and associated filing fees. It is important to know the rules of your specific state before filing for a business entity and to know the implications of leaving something as seemingly small as an “Inc.” off business cards and emails.
Contact the Attorneys at Tishkoff
If you have questions or concerns about business law or related matters, be sure to reach out to an attorney in Michigan today. The team at Tishkoff is here to help. Call our office today. Toll Free: 1 (855) TISH-LAW.