It has long been a requirement that a business operating in North Carolina under an assumed name file a certificate with the register of deeds identifying the actual name of the business owner. This information only filing would appear to be a simple task, but it is often of low priority and easily overlooked. To update this statutory requirement and make it more effective, North Carolina recently enacted a new Assumed Business Name Act. The new statute not only creates new compliance requirements, it also provides that an existing filing must be updated or it will expire in December 2022, and it also prescribes criminal and civil penalties for failure to properly comply.
Like the former statute, the new law sets out the methods and details required to file, amend, and withdraw an assumed business name certificate. The original filing required for businesses operating under an assumed name is now more detailed and calls for more specificity on the part of the business. One often disregarded feature of these requirements is that any change in the information in the certificate requires the filing of an amendment within sixty (60) days of the change.
But the news is not all bad. The new statute creates an online, public database of assumed names to be maintained by the North Carolina Secretary of State. In addition, a business operating under an assumed name in multiple counties need only file in one county and businesses acting under multiple assumed names may include up to five assumed names on one certificate.
With the enactment of the new statute, businesses can no longer register a new certificate or make amendments under the former statute. At this point, any changes in the filing must be done by filing a certificate under the new statute. All businesses operating under assumed names should revisit this issue and determine if any action is necessary or advisable. Consideration should be given to updating existing certificates by filing a new certificate and in all events these actions should be taken before December 2022.
If you have any questions or would like further information on North Carolina’s Assumed Business Name Act, please contact your attorney or Kim Bayless at Poyner Spruill.