Confusing Business Registration Terms and How to Make Sense of Them
Posted by Megan Malarkey
March 24, 2022
They say the only things certain in life are death and taxes. We believe that list is incomplete. We believe the only things certain in life are death, taxes and the eternal confusion caused by the various names corporate documents can go by across different jurisdictions. In this post, we’ll look at some of the most confusing business registration terms and common documents that go by a variety of names so that you can know what someone is talking about even when you don’t.
Let’s Start with the Certificate of Incorporation
Domestically, this document confirms an entity’s formal formation. It’s often required to secure state and local business licenses, open a business bank account, hire employees, set up payroll and more. It also has a number of aliases! Those aliases are dependent on entity type and jurisdiction, too. The Certificate of Incorporation (for Corporations) also goes by Certificate of Formation (for LLCs), Articles of Incorporation, Articles of Organization and even Certificate of Organization (for LLCs in Connecticut, for example).
For foreign registration, the document serving this purpose also goes by Statement of Qualification (or simply Qualification), Certificate of Authority, Application for Authority and the wildly different Application for Certificate of Authority.
Since we’re talking terminology here, a quick note on what “foreign” and “domestic” mean in this context. Domestic registration refers to a business registering in its home state. This is typically the first state it registers and does business in. A “foreign” registration does not refer to a registration in another country outside the U.S. It merely refers to a registration in another state, outside the entity’s home state. Capisce?
Then There’s the DBA or, “Doing Business As”
This is the name that an organization sometimes selects to do business under instead of the name that’s registered. Typically this has to do with registration name availability and branding. A DBA also comes in handy if you want to establish multiple businesses without having to create unique entities for each. You can effectively run them all under one roof.
That said, DBAs go by lots of names. (There’s some delicious irony in there, no?) A DBA is also known as a fictitious name, a fictitious business name (or FBN), a trade name and an assumed name. They’re all slightly different but refer to the same thing.
Related: Enjoy this fun piece from CNBC that details “19 Famous Companies that Originally had Different Names.”
We’ll put the pen down for now, but rest assured, there will be a Part II to this piece. There are plenty of confusing business registration terms.