When a business changes hands through an asset purchase, the buyer often wants to keep the existing "brand name" or DBA (Doing Business As) to maintain the goodwill built with customers. While it might seem like a complex process, transferring an assumed name in Texas is straightforward if the right steps are taken in the purchase agreement and with the state.
Securing the Name in the Asset Purchase Agreement
The transfer of a DBA begins with the Asset Purchase Agreement (APA). Because the value of a business often lies in its reputation, the APA should explicitly state that the buyer is acquiring all "goodwill" and "brand assets". To be safe, the contract should specifically name the DBA—for example, "World's Greatest Restaurant"—and include a "further assurances" clause. This clause ensures that the seller is legally obligated to sign any additional documents required by the state to complete the transfer.
The Mechanics of the Transfer
Mechanically, you don't "transfer" a DBA certificate from one person to another like a car title. Instead, it is a two-step filing process:
- Abandonment: The seller must file a Certificate of Abandonment of the assumed name with the Texas Secretary of State (or the county clerk for sole proprietorships).
- New Registration: The buyer should file their own Assumed Name Certificate at or shortly after the business sales closes.
This process ensures that the public record accurately reflects which legal entity is now responsible for the business operating under that name.
Understanding the Texas Assumed Business and Professional Name Act
All assumed names in Texas are regulated under the Texas Assumed Business and Professional Name Act, found in Chapter 71 of the Texas Business and Commerce Code. This law dictates where you must file based on your business structure:
- Business Entities (LLCs, Corporations): Must file with the Texas Secretary of State.
- Sole Proprietorships/General Partnerships: Still file with the County Clerk in the county where the business is located.
Failure to properly register or update an assumed name can lead to legal complications and may prevent confusion among the public.
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