FAILURE TO FILE AN ASSUMED NAME CERTIFICATE

CIVIL CONSEQUENCES

Now that you have read this information and learned that the Assumed Name Certificate does not grant you any rights to the business name you’ve selected you might be inclined to save your money and forego filing the Certificate. But this decision could have serious consequences. While a business that fails to file an Assumed Name Certificate remains subject to civil actions (lawsuits) brought against the business, the law does not allow the business to bring an action against others. And if a suit if filed against the business, the court can require the owners of the business to reimburse the party bringing the lawsuit for the costs, including attorney’s fees, incurred in locating the business owners and bringing them before the court.

CRIMINAL CONSEQUENCES

And if the limitations on the business’ right to bring a civil action against someone who, for instance, breaches a contract with the business, and the penalty of having to pay the expenses of someone who sues your business which is operated without an Assumed Name Certificate are not enough, there is also the potential for a two thousand and no/100 dollars ($2000.00) fine for conducting a business under an assumed name without filing a Certificate when the business is required to do so. Texas Business & Commerce Code §36.26.

CONCLUSION

This is just a small amount of the information which you are presumed by law to know. The old adage “Ignorance of the law is no excuse” still applies. In the new global economy and this age of International Trade Names, Internet web addresses and the like you are responsible for ensuring your compliance with all applicable state and Federal laws. Many small business owners find the task overwhelming and decide to hire an attorney to assist them through the legal maze before any problems come up. Others wait until an issue arises which requires expensive, immediate attention before frantically searching for an attorney to help them. Only you and your attorney can decide which choice is right for you and your business. I wish you success in all your endeavors. 

*This information is a general overview of the law regarding Assumed Names in Texas. It is not legal advice and is no substitute for consultation with an attorney regarding your specific legal matter. Do not rely on this document or the information contained herein in making decisions regarding legal matters.  

© 2000 Michael Hrabal, P.C. All Rights Reserved.