Exempt organizations that wish to change their name often secure a trade name or “do business” under a fictitious name. Presumably they opt to use a fictitious name rather than formally change their name because they believe a legal name change is too much trouble or they don’t know how to accomplish it. In our experience, operating under a tradename or fictitious name causes confusion and can dilute the organization’s brand. A better approach is to change the organization’s legal name with both state and federal authorities to present a unified and cohesive brand to donors and supporters.
State Filings. The process to change the name under state law differs depending on the type of entity as follows:
- Corporations. Organizations structured as nonprofit corporations can change their legal name by amending their Articles of Incorporation to reflect the new name. In most states, this means adopting the amendment and filing it with the state agency that handles incorporation. Some states, such as Arizona, also require the amendment to be published in a newspaper of general circulation.
- Trusts. Trusts can usually be amended by the trustee(s) and do not have to be filed with any state agency.
- Unincorporated Associations. Unincorporated associations do not file documents with state. Instead, they adopt an organizing document such as Articles of Association or a Constitution. The officer, trustees or members need only adopt an amendment to change the name of the Association.
Federal Tax Filings. Once the name change has been accomplished at the state level, the organization must alert the IRS of its new name by reporting the new name on its next Form 990 or Form 990-EZ. Check the item B box in the heading of Form 990 if the organization changed its legal name (not its “doing business as” name) and if the organization has not reported the change in correspondence to the IRS.
Further, evidence of the name change must be attached to the Form 990. The supporting documents required to report a name change depends on the type of organization. The chart below sets forth the supporting documentation required:
|IF the organization is . . .||THEN attach . . .|
|A corporation||A copy of the amendment to the articles of incorporation, and proof of filing with the appropriate state authority.|
|A trust||A copy of the amendment to the trust instrument, or a resolution to amend the trust instrument, showing the effective date of the change of name and signed by at least one trustee.|
|An unincorporated association||A copy of the amendment to the articles of association, constitution, or other organizing document, showing the effective date of the change of name and signed by at least two officers, trustees, or members.|
Reporting the change on Form 990 will update the IRS’ internal records and the online Select Check tool; however, the organization will still have an outdated determination letter reflecting its former name. To obtain a new letter reflecting the new name, organizations can write the EO Determinations Office to request an affirmation letter showing the organization’s new name and confirming its tax-exempt status at the following address:
Internal Revenue Service
Exempt Organizations Determinations
P.O. Box 2508
Cincinnati, OH 45201
Fax: (855) 204-6184
By following these steps, organizations that wish to change their name can present a clear and unambiguous name and brand to donors, beneficiaries and government regulators. Accordingly, organizations should move ahead with legally changing their name rather than using a fictitious name to conduct their business.
Ellis Carter is a nonprofit lawyer licensed to practice in Washington and Arizona. Ellis advises tax-exempt clients on federal tax matters nationwide. If you are seeking legal advice, contact email@example.com or 602-456-0071 for information about our services.