If you are still transacting under a business name and hope to be legally protected from liabilities and legal issues, I'm sorry to burst your bubbles, but you are not.

I know you were probably told to start small and register your business as a business name (enterprise) instead of as a Limited Liability Company (LLC) to save money, but that's not entirely true. In fact, it becomes penny-wise pound foolish over time.

1. If you want a business structure that can legally protect you from being personally liable for issues that arise in your business, an enterprise will not protect you; only an LLC will.

2. You can not enter into contracts and Agreements with your business name registration. This is because your business name does not have the legal capacity to enter into contracts only an LLC can.

So if you have been entering into contracts with your enterprise or business name registration you have been doing that the absolute wrong way.

3. Your business name cannot own assets in its name.

Do you want to buy and own properties and assets in your company name? Make sure it is an LLC, you can't use a business name because by law, it lacks the capacity to do that.

4. Ideally, you can't own Trademarks and other IP assets in your business name except an it is an LLC...

I said ideally here because I have seen some trademark registrations even done by some Lawyers where the applicant of the trademark was a business name.

Unfortunately, the trademark office will not educate you on this and they will still go ahead and file for you, but legally speaking, a trademark is an IP asset which can be sold or transferred or even licensed...

and your business name being the owner of the trademark lacks the legal capacity to do any of these things.

I want to wrap this up but let me just finally say this last one.

5. You cannot attract investors with your business name registration.

Investors may like your ideas and desire to invest based on what they are seeing however, you will need to register a new company or do an upgrade to keep serious investors.

Now if you know you are still using a business name, send me a direct message so we can help you upgrade to a limited liability company.

If you are yet to register your business and you are considering registering your business, send me a DM let's also help you register.

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