Guide to Changing Your Business Name at Collective

Why This Matters

Changing your business’s legal name impacts your account differently depending on whether you are currently in the onboarding process or are already an active S Corp member. Because your legal name must match across the IRS, the Secretary of State, and our payroll partner (Gusto), a name change requires a specific manual workflow to prevent compliance issues.

Note: This article only applies to S Corp Tier memberships.

Collective ensures your business name is synchronized across your tax and payroll systems. Any mismatch at the federal and state level can delay your setup. For members moving toward their first payroll, an exact match is a requirement for activation.

How Business Name Changes Affect Your Payroll

For Members on the S Corp tier, your business name must match IRS and state records exactly to process payroll through our partnership with Gusto.

For New Members (During Onboarding)

Changing your legal business name before your first payroll can cause a delay of 3 to 6 months.

• The Restriction: Most payroll providers, including Gusto, require an exact name match with the IRS and the Secretary of State to authorize tax filings.
• The Match Requirement: If you join Collective with an already-amended LLC name, but the IRS name change is still pending or has not been initiated, payroll accounts cannot be established. Gusto runs a match across your business name with the state and the IRS – any mismatch will block and cause delays in your payroll setup.
• The Result: Any mismatch will block your first payroll until the IRS processes the change. This is particularly critical in states like Colorado, where state registration may be blocked if names are not identical.

Pro Tip: To avoid delays, we generally recommend completing onboarding and running your first payroll under your current name. Once your first payroll is under its belt, we’ll handle the heavy lifting with the IRS and the state to get your name change finalized in the background.

For Active Members (Post-Onboarding)

If you have already run your first payroll and your tax accounts are fully configured, a name change typically has a minimal impact on your daily operations.

• Continuity: In most cases, payroll continues to run under your existing company name while the IRS processes the update.
• Exceptions: Payroll may be paused if the change is classified as an "entity change" (such as moving your business to a new state) rather than a simple name amendment.

The Name Change Workflow

Updating a business name with the IRS is a manual process. While a name change may seem simple, the request must be made at both the IRS and state-level. Collective helps manage this transition to keep your business in good standing.

Timeline

• Total Duration: Approximately 3 to 6 months, depending on IRS and state-level processing times
• IRS Confirmation: The IRS usually mails a physical confirmation letter about 3 to 6  months after receiving your request.

Changing your LLC name at the state-level is generally a simpler process, and many state authorities will resolve a name-change request within a few weeks; however, the IRS can take 3 to 6 months to process the amendment.

Steps to Complete

1. Document Preparation: Your Collective team will upload a draft of the IRS name change letter to your Collective dashboard.
2. Signature & Mailing: You must provide an ink signature on the letter. Collective will send the signed document via Certified Mail (a $10 fee applies).
3. Tracking: Collective will provide a tracking number so you can confirm the IRS received the request.
4. Final Updates: Once you receive the official IRS confirmation letter, upload it to your Collective documents folder. Our team will then update Gusto and the relevant state agencies on your behalf.

Note: Gusto and state agencies cannot be updated until we have the official IRS confirmation letter in-hand.

Summary of Impacts

Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as legal, financial, or tax advice.