Using a Pen Name

If you’re preparing to publish (or just beginning to write) you may consider using a pen name. I have a couple of friends that were getting married. She was constantly annoyed that her maiden name was mispronounced and his last name was Thigpen. Yes, Thigpen rhymes with pigpen. When they married they decided that they were both changing their name to Beck. Whether you hate your name or just want to use a catchier name, you may choose to use a pseudonym.

Choosing a Pen Name

To me, this was one of the hardest steps. How do you figure out one little word or phrase that defines your writing? Here is some good advice that I found on business.gov.

Whether it’s a clever moniker, a personal tribute, or simply picked out of hat, your business’ name will frame its identity. The significance of choosing a name can sometimes be a tricky undertaking. You may find it helpful to keep alternatives in mind during your selection process. If you’re having some trouble selecting a business name, here are some tips to consider.

Imagine how the potential name will

  • Look (on business cards, advertisements, with a logo)
  • Sound (ease of pronunciation)
  • Be remembered (connotations the name may incite)
  • Distinguish you from competitors (avoid trademark and copyright infringements)

You may want to avoid

  • Embarrassing spellings, abbreviations, profanities, potentially offensive undertones
  • Implied associations with organizations/people the business is not connected with

#1 – Make a Keywords List

So sit down with a pad of paper and do a little freestyle word associating. Think of all the words you would like your writing to be associated with. Think of images. Think of descriptive terms. Think of animals and colors. Go to an online thesaurus. Consider business endings to add to your pen name like “Enterprises” or “Creatives”. Make a list of your favorite words.

#2 – Search for a Web Domain

The first step to finding out if your pen name is available is to find out if the web domain is available. Even if you  never use it, it’s good to own it and possibly use the free email that comes with the purchase. GoDaddy, among others, offers free hosting and email plans. And buying the domain name locks in your ownership of the name.

If you need some help getting creative, Wordoid Web Startup is my favorite source to help you create new web names that sound like real words. If nothing else, it’s a fun resource.

#3 – Do a Google Search

Once you’ve decided on your name and made sure the domain is available, do a general Google search. Search for funny spellings and anything similar to your name.  A Google search can reveal whether your choice is already an author’s name or a famous celebrity. Move on until you come to a unique name. Unique doesn’t mean that the name isn’t a real name. There are other people named Stephenie Young, for example, but none of them are famous or celebrities.

#4 – Do a Registration Search

Once your online search is complete, do one final search. Check with the USPTO (US Patent and Trademark Office) and make sure there are no registered Trademarks for your new business name. Then go to your state’s Secretary of State website to do a business name search. Here is the Ky Business Name Search page. There is a link to your state’s Secretary of State page on the Business Incorporation page.

Pen Names and Copyrights

When filling out the Copyright information, you can easily use a Pseudonym. According to the U.S. Copyright office, you can additionally choose whether or not you want your legal name associated with the copyright. If you want your real name to remain private, you can file with only your Pseudonym.

Make a Business

One thing to consider when using a pseudonym is whether you want to keep your business accounts separate from your personal accounts. It is handy to have a separate checking account for your writing business. It makes things simple at tax time. And if you are able to receive checks as a different name (your pen name) it simplifies things as well.

Choosing a Type of Business

If you choose to create a business for your writing, you will need to decide which type of business structure you want. Basically, the more involved the business structure, the more paperwork and cost you incur, but the less liability you have personally.

Here are the basics in my own words:

Sole Proprietorship: Your business is tied to you personally. The paperwork is more simple. If someone sues the company, they are suing you. If you screw up, you are liable. There are no partners. This is what I recommend for someone starting a new business. You can move up to a corporation once you really start making some money. (Disclaimer – If you’re well-established and have a big net worth, go ahead and move up to the corporation or LLC to protect your personal assets.) This type of business is easy to start and easy to close. However, it’s harder to get employees to work for you.

Partnership: This is more complicated. I do NOT recommend you do this. If your business structure requires that multiple people are involved, I recommend that one person own the business and the other get profit-sharing or that there are two separate business entities. Partnerships are like being married, and divorces are messy and expensive and happen more often than you think.

Limited Liability Corporation (LLC): This is an extremely flexible structure that is good for partnerships, multiple business holdings, single business entities, etc. If you’re moving up from a sole proprietorship, I’d recommend this as a next step. The paperwork required is still much simpler than corporations and you can do what you want with the profits. The tax structure isn’t taxed like a corporation – it still acts like a sole proprietorship. But you still get the protection of “limited liability”. If someone sues the business, it’s separate from your personal assets. They can still sue you as the owner of the business. The liability is LIMITED, but not completely separate. Be aware that the LLC is tied to its members. If you sell the business, it will have to be refiled under the name with the new owners. The current LLC is dissolved. Also, you are required to pay self-employment tax, Medicare, and Social Security.

Be aware that an LLC does NOT protect you from owing on business debts. If you choose to make purchases on credit for your small business, your creditors will require you to sign PERSONALLY for those purchases. If the business fails, you will still be personally liable for those debts. However, any purchases made by the business – should it fail – will fail with the business.

S-Corp: This is a special type of corporation that has certain tax advantages. The owner is a shareholder. In an S-corp, the shareholders can avoid double taxation. In other words, when your business makes a profit, it gets taxed. Then, when you take a draw or get a paycheck, you get taxed on your income. Double taxation. This creates a business that is a completely separate entity from its owner. This makes it easy to sell or transfer the business. However, there are stricter laws on how you run your business. For example, you have to keep meeting minutes.

Corporation: If you really get big and choose to take on shareholders, you will need to become a full-on corporation. This requires a lot more paperwork and a different tax structure. Oh, and lawyers and accountants and double taxation… Have fun!

Non-Profit: These are usually for educational, religious, or charitable organizations. The good news – you don’t pay taxes! The bad news – you have to jump through a lot of hoops and red tape.

Here’s an informative link on Business Incorporation.

What To Do

If you’re looking for the most simple and straightforward way to have a business and write with your Pen Name, go with a Sole Proprietorship. Here are the steps that you’ll need to follow.

  1. Research and Decide on a Name – see the info above for details
  2. Buy Your Domain – just do it
  3. Register Your Name – In my state, a sole proprietorship needs to file an assumed name certificate with the county clerk’s office where the business is located.For specific information for your state, go to the Doing Business As Registration page of business.gov.
  4. Register Your Trademark – You can go back to the USPTO and pay to register your trademark if you like, but in the present internet age, you’re pretty much covered. Unless you came up with something really clever that’s going to make you a lot of money, I don’t recommend it.
  5. Register for a Tax ID – You probably don’t need one, but it is free to obtain. I needed one to open my bank account. You can apply on the IRS website.
  6. State Tax Registration – head to your state website and register to pay your taxes.
  7. Open a Checking Account – This checking account is for your business only. Put a set amount of start-up capital in there. For example, $500. The only money that goes into this account is for the business. The only thing you pay for is stuff for the business. Don’t buy the latest thriller from Amazon from that account because it’s handy. Open the account in your name, “Doing Business As” your business name.