Rebranding is something almost every company goes through, even the biggest ones. It’s normal for things to go stale, and often, changes are necessary to bring new life to a business.
Most companies will reevaluate their strategies every few years, and this is usually followed by a refreshed logo or updated mission statement. In more extreme cases, they’ll select a new name. This allows them to provide the same products and services while getting a complete makeover.
Is this something you’re now considering? Then read on to find out how to change your business name with the IRS.
Why Change Your Business Name in the First Place?
You may currently be happy with your business name, and are wondering why people bother with this step. In addition to having something more appealing, there are other advantages you can get with this adjustment.
Here are a few reasons why a business owner would go through with an IRS name change.
Correction of Errors
If you’ve noticed an error in the original business name submission, or if the business started using a different name, then you’ll have to correct the error. This means contacting the IRS so they can update their records accordingly.
Compliance With Local or State Regulations
In some cases, you’ll have to change your business name to ensure you’re compliant with local and/or state laws. Updating the IRS is part of ensuring consistency in records across different government entities.
Avoiding Confusion
In your time as a business owner, you might’ve noticed other brands that have similar names. Or the existing company name may have negative associations. In either situation, a name change with the IRS can clarify things and give your business a better image.
Legal Structure Change
Have you changed the legal structure of your business? For example, you might go from a sole proprietorship to an LLC. In this case, you’ll probably have to update the business name with the IRS.
Mergers and Acquisitions
In mergers and acquisitions, there will be new ownership of the resulting company or a combination of entities. Many will choose to change the business name while updating records with the IRS.
Succession Planning
Over time, you may have a change in leadership or ownership due to succession planning. You may want to change the business name to reflect the new management.
Expansion or Diversification
Stagnation is never good for a brand; expanding into new markets or diversifying products and services is what will drive growth. If you’re doing either, you might choose to change your company name to better reflect your current or future business activities.
How to Change Your Business Name With the IRS
Those interested in changing their business name with the IRS will want to see if it’s worth the trouble.
Generally speaking, if you have a limited liability company (LLC) that’s not a single-member LLC, or you have a corporation, and you’ve filed a tax return before, then all you’ll need to do is check the name change box when filing your next annual tax return. You don’t even have to mention the old company name.
However, if you haven’t filed a tax return before, and you’ve received your employer identification number (EIN) recently, then you’ll have to write the IRS to request the name change. In this letter, you’ll need:
- Your EIN (current one)
- Old business name
- Complete business address (old one)
- New business name
- Complete business address (new one, if applicable)
- Date when the name change occurred
- Copy of the certificate of amendment you filed with the state
After an owner or authorized business officer signs the letter, you can send the letter. On average, it’ll take the IRS around six weeks to process your name change. Do note that it can take longer if you’ve omitted information; they’ll ask you to provide it before processing your name change.
Types of Name Changes
As you might already know, there are various business structures. Each type will have its own specific steps to follow for a name change, so we’ll discuss them in detail below.
Sole Proprietorship
You’ll need to write to the IRS to notify them of the name change. Use the mailing address of where you file your sole proprietorship’s tax returns. Make sure an officer has signed the letter first.
Partnership
With a partnership, you’ll need to file Form 1065, the US Return of Partnership Income. On page 1, check “name change,” add the new name of the company, and have a company officer sign the form before sending it to the IRS.
LLC
An IRS LLC name change is perhaps the easiest one to perform. All you need to do is put down a name change statement on your company’s tax return.
Forming an LLC is easy as well, if you haven’t already done so. Simply use our business registration services, which are quick and painless. They’re also priced competitively, so you don’t have to spend a fortune to create a business.
Corporation
If you’ve changed your corporation to an LLC, then you’ll have to apply for a new EIN. Otherwise, you can use Form 1120, the US Corporation Income Tax Return. When filing your annual tax returns, you can check “name change” on page 1. The same goes for S corporations, except they’ll file Form 1120S.
For all corporations, you won’t have to put the old name of the company. As with the other business structures, you’ll need a company officer to sign the form before sending it.
Other Steps You Might Need to Take
Depending on your personal situation and business structure, you may need to take other steps to make sure your brand’s name change goes smoothly and that you’re compliant. You may need to perform the following actions.
Obtain a New EIN
As mentioned before, there are circumstances that warrant a new EIN for your company. For instance, if you have a partnership or corporation, you’ll probably have to apply for a new EIN, whereas if you’re a sole proprietorship or a single-member LLC, you typically won’t need to.
File Form 8822-B
If your business has a new physical address, or the responsible party for the business has changed, then you need to file Form 8822-B. Technically, an IRS business name change with Form 8822-B is possible. However, the IRS suggests only using it for significant name changes.
Change Your Business Name With the IRS Correctly
Now you know how to change your business name with the IRS. As you can see, it can be quite complicated, especially since there are different rules for the various business structures available. This is why it’s important to consult with a tax professional or legal advisor to ensure you follow the appropriate procedures.
On the upside, the easiest way to change your business name is to have an LLC. If you haven’t actually created your brand yet and have been thinking things over, then it can be beneficial to choose the LLC route, as it’ll provide you with many benefits besides easy name changes.
Would you like assistance creating an LLC? Then sign up with Business Anywhere.
