Imagine you and a friend, call him Joe, become partners in a Pennsylvania business where you fix up the outsides of people’s homes. Maybe you replace their windows and doors or do some exterior painting. Business is coming in nicely, and some customers have referred you to other clients. However, a few customers asked what they should call you when they recommend you to their friends. At this point, you realize if you and Joe want the business to sound more recognizable and professional, it should have a name.

Inspired by the excellent reviews the company received, you and Joe now consider yourselves the kings of your craft. From that idea, the name is born: “Kings Exteriors.” You paint it on the sides of your vans, add it to your business cards, and put it as a header on your contracts. Everything is set.

But wait. If you continue to conduct business without registering or notifying certain governmental authorities, namely, the Department of State, you run the risk of being fined under a variety of laws.

Fictitious Names Statutes

The first and most important law to worry about is Pennsylvania’s Fictitious Names Act (FNA), 54 Pa. C.S.A. § 301 et seq. In short, this act requires an entity that does business in Pennsylvania under a fictitious name to register that name with the Pa. Department of State. For your reference, a fictitious name is defined as “any assumed … name, style or designation other than the proper name of the entity…” Kings Exteriors undoubtedly fits this definition.

Consumer Protection Law

The other law to keep in mind is the Consumer Protection Law (CPL), 73 P.S. § 201-1 et seq. Failing to register under the FNA also implicates this law, which I discussed in a previous blog post. Pennsylvania courts have held that if a business doesn’t register its name, that business violates the CPL and consequently, risks facing possibly thousands of dollars in civil penalties. Commw. ex rel Corbett v. Peoples Benefit Services, Inc., 895 A.2d 683, 695 (Pa. Commw. Ct. 2006).

Registration

To register Kings Exteriors, the Department will want to know a variety of basic information about you, Joe, and the type of business you conduct. This includes a short description of the business, your address, the business address, etc. You may be required to publish notice of your intention to register a fictitious name in the county where the business is mainly located.

There is also a list of words that you either are not allowed to use in your business name, or you must meet some other qualifications before using them. For example, you could not call your company “Kings Exteriors University” or “Kings Exteriors Incorporated” without first meeting the requirements of university or incorporation status.

Remember to keep your registration updated. That means that if you and Joe decide to work inside homes as well and rename the business “Kings Interiors & Exteriors”, you must notify the Department.

Contract Breach

An interesting provision of this law is that unless you register, the business will not be able to sue in court. For example, assume that Kings Exteriors has not registered its fictitious name with the Department, but the company signs a contract with Susan to replace her windows. You do the work for her; then she refuses to pay. In that case, you cannot take her to court for breaching the contract until you register the business’s name. Note that the contract is not void, but it is unenforceable.

Competition

Congratulations — your business is now registered, and for a while, things seem to operate smoothly. Then a customer calls you one day and says that they noticed you opened another location two hours away (but still in Pennsylvania). Naturally, you’re confused because you only have one office. A quick Google search reveals that, sure enough, a different Kings Exteriors launched a couple hours away.

You want the company to change its name because your customers might get confused, or prospective customers might choose to patronize the other store. Is there any way to compel the competitor to change its name?

Under the FNA, no. The act does not provide you with exclusive rights to or trademark in your fictitious name, and other entities are allowed to register an identical name. All that to say — be aware that even though you registered your name with the Department, someone else can start a business and name it the exact same thing. This provision of the law might understandably be irritating to you, but read on for some good news…

State and Federal Trademark Laws

The good news is that you may be able to bring an action for trademark infringement under state or federal law or both. There will be questions of who registered the name first (if at all), who used it in business first, and what geographic areas the businesses reach. Note that there are both state and federal trademark laws. The specifics of these laws are a discussion for another post, but in the meantime, these links can provide you with a helpful introduction to trademark issues.

U.S. Patent & Trademark Office Guide

Pa. Trademark Registration

Last Points

Here are the final things to remember:

1. Register your name with the Department so that you avoid violating the FNA and CPL.
2. Failing to register prevents you from suing under the business name.
3. Registering does not grant you trademark protection. Other people may be able to use the same name.
4. If you change your business name, update your registration with the Department.

With this guide in mind, you, Joe, and Kings Exteriors will be well on your way to running a successful — and legally protected — business.

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References

Commw. ex rel Corbett v. Peoples Benefit Services, Inc., 895 A.2d 683, 695 (Pa. Commw. Ct. 2006).

Consumer Protection Law (CPL), 73 P.S. § 201-1 et seq.

Fictitious Names Act, 54 Pa. C.S.A. § 301 et seq.

Pa. DOS Fictitious Names Explanation