Using the Acquired Businesses Name on Day 1
May 10, 2024
by a searcher from The University of Texas at Dallas - Naveen Jindal School of Management in Nacogdoches, TX, USA
I'm in the process of purchasing an existing business via an asset purchase. I have an LLC setup that I will use to purchase the business; however, I don't understand how to change the name of my LLC so that I can operate the newly acquired business on day 1 using its current business name. Can anyone provide insight on this?
My understanding is that the current Owner will need to change the name of his business to something else in order for me to rename my LLC to that name; however, this would not take place until after Day 1, so what do I call the business during that transition period? What name do customers put on checks?
Thanks in advance.
from Montana State University in Missoula, MT, USA
from Creighton University in Los Angeles, CA, USA
1. Obtain consent from the seller to use the business name during the transition period before the acquisition is finalized. Have them grant you a limited license or permission to use their business name temporarily.
2. Form your new LLC with a generic name to start, since you cannot officially use the acquired business's name yet.
3. Once the asset purchase is complete, immediately file Articles of Amendment with your state to change your LLC's name to the acquired business name. This legally changes your LLC's official name.
4. After the name change is approved, update all registrations, licenses, permits, tax accounts, bank accounts, merchant services, etc. to reflect the new LLC name which matches the acquired business.
The key is getting the seller's consent to use their business name briefly until your LLC name change is approved. During that transition, you can operate using language like "ABC LLC, doing business as [Acquired Business Name]" on customer communications. But you cannot permanently use the acquired business name without changing your LLC's legal name through the proper state filing after the sale closes.
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