Freelance business names in contracts?
June 10, 2013 1:52 PM Subscribe
How official does a business name have to be to be used in contracts?
I have been freelancing under my name with "Co." attached (i.e. Sreiny Co.) over the last few months and am going to be subletting a space in a studio from a local firm. I haven't officially registered Sreiny Co. in the state I live in (Illinois), and have payments just made out to Sreiny when I invoice clients. The subletting contract has Sreiny Co., and I'm feeling like I should have it changed to just list my name. Does a name have to be registered as an LLC to be used in contracts of this sort? What don't I know about this type of situation that I should know?
I suspect I may get a lot of "get a lawyer" answers, but was hoping this was simpler than that. I'm new to being out on my own.
Thanks.
I have been freelancing under my name with "Co." attached (i.e. Sreiny Co.) over the last few months and am going to be subletting a space in a studio from a local firm. I haven't officially registered Sreiny Co. in the state I live in (Illinois), and have payments just made out to Sreiny when I invoice clients. The subletting contract has Sreiny Co., and I'm feeling like I should have it changed to just list my name. Does a name have to be registered as an LLC to be used in contracts of this sort? What don't I know about this type of situation that I should know?
I suspect I may get a lot of "get a lawyer" answers, but was hoping this was simpler than that. I'm new to being out on my own.
Thanks.
IAAL, but I am not admitted in Illinois, IANYL and TINLA.
In your business, do you ever have clients who try to do things themselves, but end up with poor results or a mess that you have to clean up? Are there things that those clients can do themselves, but other things they realistically can't do? And is part of the problem the fact that the clients don't know which is which?
It might help to think of lawyers, contracts and business set-up things in the same way. There are some things you can do yourself, and others where you can quickly get in over your head. If you don't know which is which, then there's a fair chance you'll end up at a lawyer sooner or later, trying to get some mess sorted out.
It's often cheaper and less stressful to do it right the first time, than to fix it after it's sideways.
What don't I know about this type of situation that I should know?
A lot, I'm afraid. Certainly, non-lawyers may be able to tell you how to fill out one form or another, but answering the more interesting question, "why should I choose one form over another?" is getting close to the practice of law, and you ultimately want to know "given my current situation and my business plans and goals, which option is best for me?" That's a question for a lawyer.
Good luck with your new venture.
posted by spacewrench at 3:12 PM on June 10, 2013 [2 favorites]
In your business, do you ever have clients who try to do things themselves, but end up with poor results or a mess that you have to clean up? Are there things that those clients can do themselves, but other things they realistically can't do? And is part of the problem the fact that the clients don't know which is which?
It might help to think of lawyers, contracts and business set-up things in the same way. There are some things you can do yourself, and others where you can quickly get in over your head. If you don't know which is which, then there's a fair chance you'll end up at a lawyer sooner or later, trying to get some mess sorted out.
It's often cheaper and less stressful to do it right the first time, than to fix it after it's sideways.
What don't I know about this type of situation that I should know?
A lot, I'm afraid. Certainly, non-lawyers may be able to tell you how to fill out one form or another, but answering the more interesting question, "why should I choose one form over another?" is getting close to the practice of law, and you ultimately want to know "given my current situation and my business plans and goals, which option is best for me?" That's a question for a lawyer.
Good luck with your new venture.
posted by spacewrench at 3:12 PM on June 10, 2013 [2 favorites]
Like spacewrench, IAAL, but I am not admitted in Illinois, IANYL, and TINLA. Spacewrench is right -- these are muddy waters, and an attorney can help. I'm just going to chime in to add a couple things:
1) In general, it's always a good idea to clearly identify the parties to a contract. Saves trouble if you end up suing each other. In fact, I suspect that if your future landlord knew that "Sreiny Co." wasn't officially registered as a business entity (LLC, corp, etc.) or fictitious name (DBA), they'd insist that you take care of that, or that you use your actual name. Just make sure you know what option is best for you -- here's where an attorney can help.
2) Your state bar has a referral service, and an initial consultation is cheap.
posted by rossmik at 4:31 PM on June 10, 2013
1) In general, it's always a good idea to clearly identify the parties to a contract. Saves trouble if you end up suing each other. In fact, I suspect that if your future landlord knew that "Sreiny Co." wasn't officially registered as a business entity (LLC, corp, etc.) or fictitious name (DBA), they'd insist that you take care of that, or that you use your actual name. Just make sure you know what option is best for you -- here's where an attorney can help.
2) Your state bar has a referral service, and an initial consultation is cheap.
posted by rossmik at 4:31 PM on June 10, 2013
Rossmilk has it; generally speaking, the names on contracts need to identify the parties. If your business name doesn't do that, then that's rather poor practice.
Get a lawyer.
But, some suggestions (IANYL, TINLA blah blah blah).
1. Register your business name. This will help take the uncertainty out of whether Sreiny Co. = Sreiny.
2. Your contracts should reflect that Sreiny Co. = Sreiny. In my jurisdiction this is usually expressed by listing the relevant party as, for example, "Sreiny trading as Sreiny Co." They may do it differently in Illinois.
posted by His thoughts were red thoughts at 6:57 PM on June 10, 2013
Get a lawyer.
But, some suggestions (IANYL, TINLA blah blah blah).
1. Register your business name. This will help take the uncertainty out of whether Sreiny Co. = Sreiny.
2. Your contracts should reflect that Sreiny Co. = Sreiny. In my jurisdiction this is usually expressed by listing the relevant party as, for example, "Sreiny trading as Sreiny Co." They may do it differently in Illinois.
posted by His thoughts were red thoughts at 6:57 PM on June 10, 2013
Nthing the lawyer recommendation.
Also, per IL law:
No person or persons shall conduct or transact business in this State under an assumed name, or under any designation, name or style, corporate or otherwise, other than the real name or names of the individual or individuals conducting or transacting such business, unless such person or persons shall file in the office of the County Clerk of the County in which such person or persons conduct or transact or intend to conduct or transact such business, a certificate setting forth the name under which the business is, or is to be, conducted or transacted, and the true or real full name or names of the person or persons owning, conducting or transacting the same, with the post office address or addresses of such person or persons and every address where such business is, or is to be, conducted or transacted in the county.
posted by melissasaurus at 7:11 PM on June 10, 2013 [1 favorite]
Also, per IL law:
No person or persons shall conduct or transact business in this State under an assumed name, or under any designation, name or style, corporate or otherwise, other than the real name or names of the individual or individuals conducting or transacting such business, unless such person or persons shall file in the office of the County Clerk of the County in which such person or persons conduct or transact or intend to conduct or transact such business, a certificate setting forth the name under which the business is, or is to be, conducted or transacted, and the true or real full name or names of the person or persons owning, conducting or transacting the same, with the post office address or addresses of such person or persons and every address where such business is, or is to be, conducted or transacted in the county.
posted by melissasaurus at 7:11 PM on June 10, 2013 [1 favorite]
Response by poster: Thanks all, very helpful. I really appreciate rossmilk's referral service link. It's daunting to know where to go and whether this would cost a whole lot.
Looking at the Cook County Assumed Business Registration:
An assumed name is issued to any business entity that uses a name other than the name(s) of the individual(s) who own or operate the business. For example, a business called "John Jones, P.C." (i.e. owner's full name and title) does not have to file an assumed name, but "Jones Wrecking" does.
And that's where I fall in the gray area, I suppose. I could see the case for not having to register, because I am "First name Last name Co." Where the ownership of the business is not in question with the name, it doesn't imply a partnership, it doesn't imply more than 1 employee (i.e. Sreiny & Co.), etc.
Would the easy thing here be just to sign the lease under my full legal name, and forego this issue with my business name? This is a sole proprietorship, so if I get sued, it's all coming from the same place.
Thanks.
posted by Sreiny at 8:53 PM on June 10, 2013
Looking at the Cook County Assumed Business Registration:
An assumed name is issued to any business entity that uses a name other than the name(s) of the individual(s) who own or operate the business. For example, a business called "John Jones, P.C." (i.e. owner's full name and title) does not have to file an assumed name, but "Jones Wrecking" does.
And that's where I fall in the gray area, I suppose. I could see the case for not having to register, because I am "First name Last name Co." Where the ownership of the business is not in question with the name, it doesn't imply a partnership, it doesn't imply more than 1 employee (i.e. Sreiny & Co.), etc.
Would the easy thing here be just to sign the lease under my full legal name, and forego this issue with my business name? This is a sole proprietorship, so if I get sued, it's all coming from the same place.
Thanks.
posted by Sreiny at 8:53 PM on June 10, 2013
IAAL that specializes in real estate law, but I am not admitted in Illinois. IANYL and TINLA. It is perfectly acceptable to sign a contract with "your full legal name DBA Sreiny Co." and common with sole proprietorships. In particular I have seen this many times on leases with small businesses.
Of course, you may want to discuss your general business plan with an attorney to see if it might be a good idea to incorporate, etc. and maybe to have them review the sublease but I don't view this as a "get a lawyer" scenario. "This" being the question of whether you need to register your business name in order to sign a contract.
posted by argyle dreams at 10:35 PM on June 10, 2013 [1 favorite]
Of course, you may want to discuss your general business plan with an attorney to see if it might be a good idea to incorporate, etc. and maybe to have them review the sublease but I don't view this as a "get a lawyer" scenario. "This" being the question of whether you need to register your business name in order to sign a contract.
posted by argyle dreams at 10:35 PM on June 10, 2013 [1 favorite]
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posted by drjimmy11 at 2:02 PM on June 10, 2013