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“What’s in a name? That which we call a rose by any other word would smell as sweet.”

Juliet clearly never served in the North Carolina legislature…

Under the current law, North Carolina businesses may always operate under the legal name registered with the North Carolina Secretary of State.  However, if a business desires to operate under a separate business name, then an assumed name certificate must be filed in each county where the business operates.  For instance, if we registered Acme Plumbing, LLC with the North Carolina Secretary of State but desire to do business in Wake, Mecklenburg, and Buncombe Counties as “Nan and Chad Plumbing”, then Acme Plumbing, LLC needs to file an assumed name certificate registering that creative name with the Register of Deeds of those three counties. Business owners risk personal liability for the operations of businesses which fail to operate under registered names.

Effective July 1, 2017, North Carolina Session Law 2016-100 imposes new assumed name requirements upon North Carolina business.  The new law requires the Secretary of State to create an online database to store information which will be uploaded by the 100 Register of Deeds’ offices.  Under the new law, a business only has to register in one county no matter how many counties they intend to offer services in.  A new addition will be the necessity of describing the “nature of the business”.  It will permit amendment of a certificate which does not appear in the existing law.  Withdrawal looks the same.  The new law contains a provision making it clear that registering an assumed name does not grant exclusive use of the name.  There is a provision for liability for executing a false certificate or violating the Article (not apparent in existing law).  It will be a Class 1 misdemeanor for false certificate and civil liability for failure to file a certificate – where there is “injury” for that failure.  There is not liability for “errors” or “ambiguity” in describing the nature of the business.  (This seems a wonderful opportunity for litigation over time).

Existing certificates (those filed under the existing statute) expire on July 1, 2022 (so if you filed next week, then you would need to update the filing in the next five years). Old forms will not be accepted after July 1, 2017 and you cannot use a certificate of amendment for the update.  So, given that the filing requires a $26.00 fee – for withdrawal and another $26.00 for the new entity, it would appear that in the next five years, businesses will have to file new forms under the new law. *

The attorneys of Hannah Sheridan Loughridge & Cochran, LLP regularly counsel clients through these issues. If you should have any  questions, please call our office.

By:  Chad J. Cochran & Nan E. Hannah

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