Can we use a DBA under S-Corp to start new Corp after bk7?

[NewStart2012]

Hello all! I've been reading the threads here and read some that somewhat apply to us; but not exactly, so am posing this question to you wonderful bunch ;)

We filed personal bk7 and are awaiting our 341. We own a service-oriented S-Corp with no assets. We have cc debts in the S-Corp name, which we were advised will not be discharged in business name; however, will be discharged for personal liability.

We are deciding whether to dissolve corp or just file final taxes and let die. Forum members advised us to dissolve and get a "true fresh start"; atty said to let die. We are leaning toward dissolving but wonder why atty says not to dissolve. We have a call into her; but her last msg was to not dissolve. We wonder whether it's bc of the cc debt in corp name?

We really don't operate business in the corp name. We have several DBA's under corp name and do business mainly from one of the DBAs. We need to keep that one DBA as that is where our source of income will come from. We also need to keep the address and phone number for that DBA. Question - if we dissolve the corp, can we open a new corp with that DBA name? If we don't dissolve the corp, can we resume business under our old corp with that DBA or start a new corp with that name? What we really need to know is how can we operate in that business name (which has no debt) in the future? What is the appropriate route to make this happen? TIA for any help/input.

Des, if you read this, would we just need to ask for abandonment of the corp from the trustee (you mentioned this in another thread)?

[HHM]

The difference between letting it die and dissolving is a simple matter of filing out a 1 or 2 page form at your state secretary or states office or doing nothing (note, you will want to file any final tax returns to let the tax authorities know not to expect anymore).

All things being equal, just file the articles of dissolution and and final tax returns and be done with it.

You are misunderstanding what it means to operate under a DBA. A DBA is simply a "name" or "title". The corporation is still the operating "legal entity". As such, so long as the corporation is active, regardless of what DBA it might operate under, it is liable for any and all business credit cards (regardless if those credit cards are in the corporate name or DBA name). So, you do need to either dissolve the corp or let it die. Also note, those DBA "names" are a type of asset (an intangible asset), just like any domain name or other intellectual property (manuals, business processes, etc). So, the corp. probably isn't exactly "asset less", but the assets it does have are probably not worth much of anything.

However, you can't do anything until either the trustee abandons the biz or the BK closes (note, not just discharge, but closes).

So, to be clear, let's separate the business "entity" (the s-Corp) from the business "operation" (what the business actually does, the service it provides). Your goal apparently is too keep the business operation. The hick-up is that the business entity owes debt and as you know, business entities don't benefit from any sort of BK discharge. So, you kill off the entity. Now, if the business is asset-less, not a big deal; you can start a new entity and use the same or similar name (i.e. new corporation, using the name of the old as a DBA). But there are always risks. If you operate under the same name, a creditor or junk debt buyer isn't going to research the subtlety of whether you are a new corp when it calls asking for money.

Since you seem so hung up on this issue, there must be some value in the "name", so be a little careful, that is an asset that can be sold in your BK. So, I probably wouldn't act to anxious to have the trustee abandon.

[NewStart2012]

Thank you so much HHM! You really cleared things up for us! Yes, I was confused about the DBAs. Makes sense to dissolve and start over after our bk closes (praying that all goes smoothly and it will close around time of discharge). Glad to know we can at least use a "similar" name and create new entity.

Diff question - someone on another thread mentioned trade name.
"What you can do is close the corporation. Make sure the 'records' show the value as being zero. Then start a new business with a format say DBA. But before you close the corpration down, get the name of the business tradenamed. Under your new business, use the tradename and nobody will realize the business went out of business."

What does that entail? Is that something we should look into doing to use one of our DBA names? Thank you!

[justbroke]

Trust me when I say this... dissolve the entity cleanly! I still get calls for my old S-Corp and a DBA even though the S-Corp is administratively dissolved and the DBA was my "alter ego" and discharged in the bankruptcy. It's a pain and these debt collectors "know" that businesses (Corps) can't discharge debt, so they need a little convincing that my new company operations are not the old company operations! I think the big problem is that I kept the same phone number for my business!

[NewStart2012]

Thank you justbroke for sharing your ordeal and advising us wisely Will do! Choosing to go against atty and following the board ;)

[frogger]

Thank you justbroke for sharing your ordeal and advising us wisely Will do! Choosing to go against atty and following the board ;)

I do believe you're on to something..........

[NewStart2012]

LOL Frogger! Thanks again ;)

[HHM]

Thank you so much HHM! You really cleared things up for us! Yes, I was confused about the DBAs. Makes sense to dissolve and start over after our bk closes (praying that all goes smoothly and it will close around time of discharge). Glad to know we can at least use a "similar" name and create new entity.

Diff question - someone on another thread mentioned trade name.
"What you can do is close the corporation. Make sure the 'records' show the value as being zero. Then start a new business with a format say DBA. But before you close the corpration down, get the name of the business tradenamed. Under your new business, use the tradename and nobody will realize the business went out of business."

What does that entail? Is that something we should look into doing to use one of our DBA names? Thank you!

Many states, probably all, allow you to reserve a "Tradename" at the Secretary of State office. When you go to your states respective Secretary of State website, it probably gives you several options as to what you want to file (e.g. Corporation, Limited Liability Company, Business Trust, etc), one of those options is a Tradename. Tradenames are essentially DBA's.

However, if you actually try to Tradename the original name of the Old Corp., it is unlikely the system will let you until the Old Corp is dissolved. The system wont allow two registrations of the same name to be active at the same time.

Probably not something you need to worry about. Just pick a new name and form a new "entity" under that name. No need to mess around with a bunch of different DBA's.

[NewStart2012]

Thanks again HHM. Last question re: this topic (I think): Since the DBA we want to use was not an entity, coul we tradename that after we dissolve the old entity?

[frogger]

Thanks again HHM. Last question re: this topic (I think): Since the DBA we want to use was not an entity, coul we tradename that after we dissolve the old entity?

If no one has the tradename registered, then you should have no problem.

As HHM said, Secretary of State is probably where you need to go in most places. Some states however, require that you register it with the clerk of superior court in the county in which the tradename will be doing business.

[LadyInTheRed]

In California, the legal term for DBA is a Fictitous Business Name. You register a FBN by filing a fictitious business name statement with the County Clerk where the principal place of business is located, not with the court or the Secretary of State. If the corporation filed a FBN statement within the last 5 years, the corporation needs to abandon the FBN before you can file a new statement using that name. Most County Clerks' websites have the necessary forms and instructions for filing and recording.

[justbroke]

It is the same in Florida. We call them Fictitious Names and they go through SunBiz!

[NewStart2012]

In California, the legal term for DBA is a Fictitous Business Name. You register a FBN by filing a fictitious business name statement with the County Clerk where the principal place of business is located, not with the court or the Secretary of State. If the corporation filed a FBN statement within the last 5 years, the corporation needs to abandon the FBN before you can file a new statement using that name. Most County Clerks' websites have the necessary forms and instructions for filing and recording.

Thank you LITR! So appreciate your input and the info for CA We set up the corp over 10 years ago and have not filed a FBN w/in the last 5 years; so, we shoul be ok, right? Also, do you know whether we have to file a FBN if the business name contains our name?

@ Frogger & justbroke - thank you again for your input as well Much appreciated!

[HHM]

At this point, just read the information for CA. Your questions are getting far too specific. Bottom line, you need to dissolve the Corp. What you do after that depends on your specific circumstances and you need to discuss that with an attorney in CA to find out your best options. We are just spit-balling here.

[NewStart2012]

Ok HHM...will do. Thanks!