A Company Cannot Be Sued Under Its Real and Assumed Names

A Company Cannot Be Sued Under Its Real and Assumed Names

 

In a recent decision of the North Carolina business law court, it considered a complaint in which a party to an agreement was sued under both its real name and it's assumed name. The defendant alleged this to be improper, asserting that the entity was subject to suit under only its real name, and that the additional claims under the assumed name were duplicative. The North Carolina business law court granted that relief.  LA Familia Cosmovision, Inc. v. The Inspiration Networks, 2014 NCBC 51, 2014 WL 5342583 (Sup. Ct. N.C. Oct. 20, 2014). 

 

In this case, “The Inspiration Networks” was named as a defendant in the action.  Inspirational, Inc., had filed a certificate of assumed name for “The Inspiration Networks.”  The suit named both Inspirational, Inc. and The Inspiration Networks as defendants; Inspirational, Inc. sought to have the reference to The Inspiration Networks removed as a defendant.

 

Defendants argue that the use of an assumed name does not create a separate legal entity, and therefore there remains only one entity that may be sued.  Defendants essentially asked this Court to hold that although one may sue a corporation under it's assumed name, one cannot maintain an action against both a corporation and it's assumed name.  Slip op at ¶ 28 (emphasis in original).

 

Accepting this argument, the North Carolina business law court held:

 

This appears to be an issue of first impression in North Carolina. The rule posited by Defendants is logically sound. For the same reason that it would be nonsensical to name the same entity or individual twice as a party to an action, a plaintiff cannot maintain an action against both a legal entity and it's assumed name.  Slip op at ¶ 29.