Almost every business owner has heard of a "d/b/a", which is short for "doing business as..." The idea is that you are transacting business using a name other than your business's true name. Idaho's equivalent of a "d/b/a" is the registration of an "Assumed Business Name." What few business owners understand is that spending $25 now to file a Certificate of Assumed Business Name with the Idaho Secretary of State's office can save money and heartache later.

Under Idaho's Assumed Business Name Act of 1997 (the "Act"), the purpose for requiring the filing of an assumed business name is to "ensure disclosure on the public record..." of the true identity of those transacting business in Idaho. Generally, those who file assumed business names fall into one of two groups: (1) individuals who don't want to form a business entity but want to transact business using a name other than their own (i.e., John Doe d/b/a John Doe Construction); and (2) official business entities that are already registered with the Secretary of State's office but want to use a different name, an abbreviation or acronym to transact business (i.e., John Doe Construction, Inc. d/b/a JDC; another example might be that John decides that he wants to start doing residential construction in addition to his usual commercial construction and therefore starts using the name "John Doe Residential Construction").

For the purposes of this discussion, let's take the following example of an individual that would fall into group #2 above: Imagine that John Doe owns, as the sole shareholder, John Doe Construction, Inc., an Idaho corporation. Following the current business trend of developing a "brand identity" and a logo, John decides that JDC sounds better than John Doe Construction, Inc., so he starts marketing his business by using the abbreviation "JDC" and a logo on business cards, stationary, invoices and trucks. However, John does not file "JDC" as an assumed business name for John Doe Construction, Inc., and has accidentally put himself in a seriously compromised position.

Under the Act, John Doe Construction, Inc., or anyone else engaging in business activities in Idaho using a name other than its legal name, does not have the right to file actions in Idaho courts. The practical repercussions of this penalty could be significant. John Doe Construction, Inc. may be unable to foreclose on a lien or sue to recover if someone fails to pay amounts owed, damages company property, or for virtually any other purpose. This can lead to expensive battles over frustrating legal technicalities and even worse, it can lead to John Doe Construction, Inc.'s inability to collect money and keep the business operating profitably.

There is a second potential problem faced by John and those individuals who have sought to avoid liability by forming a corporation, a limited liability company or other limited liability entity. By having John Doe Construction, Inc. engaging in business under the unregistered business name JDC, John himself may inadvertently be liable for actions of the business. For example, assume John signs his name on a contract on behalf of "JDC" and the contract does not mention John Doe Construction, Inc. The other party could claim John is personally liable for any breach since they had no knowledge of John Doe Construction, Inc. and there was no assumed business name registered at the Secretary of State's office. By not properly registering an assumed business name, John has potentially lost the protective shield that he sought by forming his business entity.

The good news is that business owners can easily reduce these risks. First, one can take a good lesson from John Doe; that is, unless there is a very good reason not to do so almost all individuals running a business should operate under an official registered *entity that offers liability protection (i.e., *a limited liability company, limited partnership, corporation, etc.). Contact your attorney and/or accountant to determine the most suitable business entity for your situation and for information on how such an entity can protect you from certain liabilities. Additionally, whether it is on stationary, business cards, invoices, advertisements, equipment, or in any other form, use only your official registered name (i.e., John Doe Construction, Inc.) or register, as an assumed business name, any other names, abbreviations or acronyms you use in conjunction with your business (i.e., JDC, JDCI, JD Construction, Inc., John Doe Residential Construction, etc.).

If you register an assumed business name, keep in mind that: (1) such registration does not allow you to infringe on another business's trademarked names, nor does it prevent others from registering the same assumed business name that you have registered; and (2) your assumed business name cannot end in "Inc.", "LLC", or in any other way implying that it is the name of an official registered business entity (consult with your attorney or the Secretary of State's office for more information regarding these restrictions).

Despite these and certain other restrictions and limitations, registering an assumed business name is an inexpensive and effective way to protect your legal rights, your business, your profits and yourself from some significant risks.