Changing a business name

[dunndw]

I opened my own business (Donelson Computers) in 2005. Now I'm thinking about changing the name to something more inclusive of the area we service. I'm trying to figure out if it would be worth it, or should I just open a new business with the new name and close Donelson Computers.

It's a Sole Proprietorship

I've got bank accounts, domain names, email, phones, business license(s) reseller agreements, etc..etc...etc. to think about

I want to offer more services to more people but I think the name is limiting. I could keep the existing domain, email forwards for existing clients, so that part isn't a big deal. I got the tech...it's the mundane business crap that causes me heartburn :-)

 

 

[Chadastrophic]

Can you just add a DBA?

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[dunndw]

I'm not sure. As a SP I believe I'm a DBA already.

[vontar]

You might want to take the opportunity to make it a LLC while you are at it.  Protect your personal assets.

The one time I ran a small PC business, it was a LLC.

[Dane]

I opened my own business (Donelson Computers) in 2005. Now I'm thinking about changing the name to something more inclusive of the area we service. I'm trying to figure out if it would be worth it, or should I just open a new business with the new name and close Donelson Computers.
It's a Sole Proprietorship
I've got bank accounts, domain names, email, phones, business license(s) reseller agreements, etc..etc...etc. to think about
I want to offer more services to more people but I think the name is limiting. I could keep the existing domain, email forwards for existing clients, so that part isn't a big deal. I got the tech...it's the mundane business crap that causes me heartburn :-)

From a business stand point it is a DBA (dunndw DBA Donelson Computers) already so changing the name wouldn't be a big deal. It is more of a pia as far as changing all the little stuff (domain names, business cards etc).

If I were you I would open a new business as a proper LLC entity and then sell Donelson Computers to the LLC (ie Dunndw, LLC dba Donelson Computers) to provide better liability protection. Let an attorney do the paperwork so that all the i's are dotted and t's crossed. It only takes one law suit to promote you to a cardboard high rise.




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[TGO David]

There's really no advantage for a one-person business to operate as an LLC because you're completely on the hook for the debts and liabilities of the company already.

[Dane]

There's really no advantage for a one-person business to operate as an LLC because you're completely on the hook for the debts and liabilities of the company already.

I disagree. My last company was a LLC with me being the only member. According to my attorney this limited my personal liability in the event of a lawsuit.



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[vontar]

I disagree. My last company was a LLC with me being the only member. According to my attorney this limited my personal liability in the event of a lawsuit.



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When I did a small business, even though I was the solo owner I was advised to do that as well for the same reason.  I was told pretty much, my business could be sued and it would keep my personal separate.  I don't think it added 100 dollars to the process if that.

 

I kept records like a Corp, but was only a LLC which meant I didn't have to have officers or something like that.

 

That being said, I don't have a degree or a ton of experience in this and it was over 10 years ago I quit doing it.

Edited July 16, 2013 by vontar

[TGO David]

I disagree. My last company was a LLC with me being the only member. According to my attorney this limited my personal liability in the event of a lawsuit.



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Did your attorney also draft your LLC papers and charge you for that service?   :)
 

My attorney advised the opposite and it didn't cost me a thing.  People have this misconception that an LLC or a Sub-Chapter "S" corp (S-Corp) can protect them from the liabilities and debts of the company, but the fact remains that the officers of the company are still liable and if you're an officer (or the only officer) of a company... that means you.  So the insulation really isn't all that great.  If a debt collector comes calling or a lawyer comes looking for blood, they're going to get it from someone!

 

It's more effective if you have several officers, for a variety of reasons.

[dunndw]

I was told by my personal financial advisor that a one man LLC doesn't offer any liability protections as well. Seems like the $$$ might be better spent for business insurance.

[TGO David]

I was told by my personal financial advisor that a one man LLC doesn't offer any liability protections as well. Seems like the $$$ might be better spent for business insurance.

 

That's what I was told also.

[wtl]

An LLC will increase your costs and record keeping. You will have to file a TN Franchise and Excise tax return. You will have to pay yourself as a W2 employee to avoid paying F&E tax on your income. You will have an additional $300 annual fee the state collects as well. I run a web hosting company with clients in 35 countries, and went from an LLC back to a Sole Prop just because of the hassle. Our terms of service clearly spell out our responsibility vs. the clients responsibilities, and liability/errors & omissions insurance can protect you.

[45guy]

Some states have very good LLC protection. Nevada is one I think Mass. Is another. You can get a LLC from them and have much more protection. Do a google on best state to file a LLC in.

[JReedEsq]

There are a number of factors in determining the circumstances in which a lawsuit could "pierce the corporate veil", or in which you are personally liable for the actions of your LLC.  I don't like to post legal advice on a public forum, but I'll say that in most cases David's attorney is correct.  I know quite a few solo practice attorneys who operate as sole proprietors if that tells you anything.  If you have a firm with other lawyers, or a business with other partners and want to shield yourself from liability for their actions, you're dealing with a different scenario altogether.