Having a Business Name As An Independent Agent

[escapeplanning]

I'm going it independent after 4 years of taking it in the rear from an agency as it would appear many do when first starting out.

I'm getting some business cards made. I was going to do "(My last name) Financial" as a business name. I've decided not to bother with the LLC until I'm rocking and rolling and have some agents under me.

My question is; Can I just throw a business name on a card and pass it out to the world? Or could that come back to bite me?

Also, any known compliance issues in using the word "Financial" in my business name without being security licensed?

 

[DHK]

If you're doing business with your first and last name, then you don't need a DBA or FNS filing.

If you're just doing your last name 'financial'... you have to not only file a DBA or FNS, but you have to get it approved by your state's department of insurance. And they won't have any issue with the word 'financial'... but they will have an issue if you don't use the word 'insurance'.

 

[adjusterjack]

I've decided not to bother with the LLC

Make sure you have proper E&O Insurance from day one, which you'll need even with an LLC because an LLC won't protect your assets if you are sued for professional negligence.

until I'm rocking and rolling and have some agents under me.

There's a joke that writes itself but I'll skip to the question. What is the relationship with those agents going to be? You'll have to determine whether they are employees or independent contractors for IRS, workers comp, and unemployment insurance purposes.

Just saying that they are independent contractors doesn't make them independent contractors. Nor does getting them to agree in writing that they are independent contractors. They may very well be independent contractors, but you have to follow the rules set out by the IRS.

 

[titeye]

If you're doing business with your first and last name, then you don't need a DBA or FNS filing.

If you're just doing your last name 'financial'... you have to not only file a DBA or FNS, but you have to get it approved by your state's department of insurance. And they won't have any issue with the word 'financial'... but they will have an issue if you don't use the word 'insurance'.

I am familiar with what a DBA is, but what does the FNS stand for?
Also, please clarify the state's dept. of insurance issue with not using "insurance" when establishing an agency. Are you saying that every agency registered with the state has the word "insurance" as part of its legal name?
Lastly, are there significant advantages of contracting under the name of an agency, as opposed to you government name, even when you have no downline agents?

I was considering establishing an agency to get away from the risks associated with providing my social security number to every Tom, Dick and Harry with whom I want to contract, or had contracted with in the past. Also, I want to start establishing credit under an EIN and business name, as opposed to personal credit. Thought this would be the avenue to take.

 

[Whammer1249]

If you use simply your last name and insurance, ie "Doe insurance" and you are independent with no agents under you, no LLC, there is still a potential issue? If basically sole proprietor, no LLC, and E&O under your personal name, and variation thereof still requires an okay from your state insurance department?

 

[DHK]

I am familiar with what a DBA is, but what does the FNS stand for?

FNS = Fictitious Name Statement (same thing as DBA)

Also, please clarify the state's dept. of insurance issue with not using "insurance" when establishing an agency. Are you saying that every agency registered with the state has the word "insurance" as part of its legal name?

Yes, unless it qualifies for an exemption. For example: investment firms or broker/dealers don't have to because less than 10% of their revenues comes from fixed insurance business. (At least per California standards.)

California links:
Business Entity Frequently Asked Questions

California has both "unacceptable" and "Improper" words:
Unacceptable Words/Phrases

Improper Use of Words/Phrases

Lastly, are there significant advantages of contracting under the name of an agency, as opposed to you government name, even when you have no downline agents?

I was considering establishing an agency to get away from the risks associated with providing my social security number to every Tom, Dick and Harry with whom I want to contract, or had contracted with in the past. Also, I want to start establishing credit under an EIN and business name, as opposed to personal credit. Thought this would be the avenue to take.

Yes, you'll want to do that if you're contracting agents and/or hiring staff. For your personal actions as a licensed professional, LLC or any other entities don't offer any protection.

A couple of other things:
1) If you're going to create a separate entity, you'll need to have that entity licensed. Which also means getting the name approved by your state's department of insurance. Without your entity being licensed, commissions cannot be assigned to your entity.

2) Don't forget to update your E&O to include either your DBA/FNS or your new entity business name.

 

[escapeplanning]

If you're doing business with your first and last name, then you don't need a DBA or FNS filing.

If you're just doing your last name 'financial'... you have to not only file a DBA or FNS, but you have to get it approved by your state's department of insurance. And they won't have any issue with the word 'financial'... but they will have an issue if you don't use the word 'insurance'.

I greatly appreciate your response! I now realize that I've got a bit more studying to do in this area!

 

[escapeplanning]

Make sure you have proper E&O Insurance from day one, which you'll need even with an LLC because an LLC won't protect your assets if you are sued for professional negligence.

So I will need to upgrade E&O as well? I currently carry $1m per claim and $3m annual aggregate. While I certainly don't wish to tarnish my name by making poor decisions, I suppose mistakes can always happen and that is something that I haven't considered if I go LLC route so thank you!

There's a joke that writes itself but I'll skip to the question.

Hahahaha nice.

What is the relationship with those agents going to be? You'll have to determine whether they are employees or independent contractors for IRS, workers comp, and unemployment insurance purposes.

Just saying that they are independent contractors doesn't make them independent contractors. Nor does getting them to agree in writing that they are independent contractors. They may very well be independent contractors, but you have to follow the rules set out by the IRS.

Independent contractors absolutely. When I bring on agents, I want them to be free from all of the traps that agencies(such as the one I'm escaping) use to profit on newbies who don't know any better! Although I would like to have an admin and potentially one or two employees working the phone ASAP. Definitely good advice and worth some thought when that time comes!

 

[escapeplanning]

Oops, I didn't work the quote thing properly sorry that will be difficult to read. This is the first time I've never actually communicated on this site. Been reading threads for years though lol.

 

[somarco]

If you're just doing your last name 'financial'... you have to not only file a DBA or FNS, but you have to get it approved by your state's department of insurance.

I believe this is state specific.

https://dbf.georgia.gov/sites/dbf.georgia.gov/files/related_files/document/Trade(DBA)Names.pdf