Legal Question in Business Law in California
Is it legal if a business represents and presents themselves as an incorporation within their business name and business advertising, but filed their fictitious name statement and business license as not being incorporated(without the necessary articles of incorporation)? If it is illegal for this business to represent and present as an incorporation, is it legal for me to file a fictitious statement, articles of incorporation, and use the improperly documented name for my business; in turn, forcing him to change his name and/or do business in a different county?
1 Answer from Attorneys
First, let's be clear about filing fictitious business names. The name of a corporation is not considered fictitious. Therefore, a corporation can do business under its corporate name without filing and publishing a fictitious business name (FBN) statement. Indeed, such a filing might cause confusion and should not be done. A corporation should file a FBN only when it is doing business under a name other than its true corporate name.
Second, I don't know what you mean by "necessary articles of incorporation." A corporation must file articles of incorporation with the Secretary of State in order to incorporate, but its articles of incorporation are not attached to, nor part of, any FBN statement it may file. An FBN statement must state, however, whether the registrant is an individual, a husband and wife, a partnership, a corporation, a trust, etc. In this instance, if the FBN statement does not state "This business is conducted by a corporation" but the business is indeed conducted by a corporation, then either the FBN statement is obsolete or incorrect, or there may be two businesses, one a corporation and the other not a corporation. Perhaps the business has recently incorporated, making its formerly fictitious name prior to incorporation non-fictitious as the true name of the (new) corporation. A number of innocent explanations are possible, as well as explanations involving errors in judgment in failing to keep the FBN registration current or to cancel it in timely fashion.
Third, general business licensing is done pursuant to local ordinances, not state law, and without knowing the city or county I cannot comment.
Finally, appropriating a name being used by someone else for their business, whether it is incorporated or not, fictitious or not, and/or properly registered or not, is fraught with peril. The ONLY type of situation where it MIGHT be safe to adopt the name of another business is when the business was a corporation and the corporation has lost its rights and its status is "forfeited" "dissolved" "merged out" or the like in the records of the Secretary of State. For example, there was a California corporation called "Gloxinia Ltd." It was incorporated in 1979 and subsequently dissolved. The Secretary of State would let you incorporate a new corporation using that name. However, the new corporation MIGHT run into problems with the old Gloxinia's creditors, former employees, etc. In your case, your theories about how you might assume this corporation's name because it MAY have made a mistake or two in filing, or keeping current, its FBN registration, are off base and very likely to get you involved in a lawsuit if pursued.
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