Legal Question in Business Law in Michigan

Re: Confused about DBA's

This response assumes that the inquiry relates to corporations chartered under the Michigan Corporation Act.

Unless the corporation which took over the "DBA" purchased or otherwise acquired rights or obligations of the corporation which ceased to use the name, the second corporation does not acquire any right to any business of the first corporation simply by taking over the "DBA".

A "DBA" ("doing business as...") is referred to in the Act as an "assumed name". An assumed name is merely an alias or other name under which the business operates. The rights and obligations of the corporation relate to the corporation, rather than to the name. Accordingly, if Corporation A operates under the name "XYZ Associates" and enters into a contract as XYZ Associates, the contract rights and obligations belong to Corporation A, regardless of the name under which it operates. If Corporation A sells its assumed name to Corporation B (and if the name is approved by the State for Corp. B), Corp. B only has the right to the name. It does not necessarily acquire the rights Corp. A has under contracts which it signed as XYZ Associates. The only way that Corp. B (using the name "XYZ Associates") has any obligations to Corp. A is if Corp. B assumed a contract obligation which Corp. A has as XYZ Associates. Otherwise, Corp. A has all of its previous rights and obigations from prior to its ceasing use of the assumed name.

Please feel free to contact me if you wish to discuss this matter. You should contact an attorney in your community to discuss the particular facts and circumstances which affect your rights and obligations. This response does not constitute legal advice, and no attorney/client relationship is created as a result of this response.