Q&A #139 – Does a nonprofit name change require an amendment to the governing documents?
Question: My nonprofit organization wishes to change its name to better reflect our mission and purpose and have more appeal to members and donors. Does a name change require us to amend our Articles of Incorporation and Bylaws?
Answer: A nonprofit organization may generally change its name either by amending its Articles of Incorporation and other governing documents, or, alternatively, registering a “trade name” (often referred to as a fictitious name, “doing business as,” or “DBA”) in the states where the organization does business. While amending the governing documents is not required, it is usually recommended to minimize confusion.
A nonprofit organization is permitted to use a name other than the name specified in its Articles of Incorporation simply by registering a trade name in the jurisdictions where the nonprofit operates and noting this trade name on the “doing business as” line at the top of page 1 of the Form 990. Under this approach, the existing corporate name is retained but is used mainly in the background while the trade name becomes the organization’s public brand. Some organizations choose this process because they have the impression that it is easier than amending the Articles of Incorporation, though the difference in cost and burden is relatively small.
The main downside of this approach is that potential donors, grantors, vendors, banks, insurers, service providers, and others outside of the organization may get confused because it can sometimes be more challenging to locate an organization’s public records when the organization is known by a trade name rather than its legal name. Further, the fact that an organization has two different names (a corporate name and a trade name) rather than a single brand identity can itself be confusing.
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Amending the Articles of Incorporation to formally change the organization’s corporate name generally minimizes the potential for future confusion, since the same one name will be used in all public filings, bank accounts, contracts, acknowledgment letters, and other documents. This approach provides a cleaner break from the prior brand identity and tends to be more transparent because it makes the organization easier to locate and research. A formal name change also tends to be perceived as more stable and long-lasting than a trade name, since the latter is so easy to change.
Planning Tip – Before finalizing a name change, do a thorough search to ensure the name is both legally available for your organization to use and not being used by others in a way that could be confusing or detrimental to your organization’s reputation. The main resources for the legal search include the U.S. Patent and Trademark Office trademark search website and the corporation databases in the relevant states. You should also do exhaustive internet searches, check for website URLs that may already be reserved, and search the IRS Exempt Organization Business Master File database. These extra steps will give you more confidence that there aren’t other organizations that are using (or have used) this name or something similar. This is important from a brand protection perspective, even if you’ve determined that you are legally allowed to use the name.
Filing a name change amendment to the Articles of Incorporation is not as difficult or expensive as you might think and is usually the preferred approach.
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