Employment Law Questions? Ask an Employment Lawyer.
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When you sold the business you sold all intellectual property of the business, including the logo. This means that any use of the logo, regardless of whether you changed the name, would be use of intellectual property that no longer belongs to you. It's no different that if you took Coca Cola's logo and replaced Coca Cola with your name. Unfortunately, this is not permissible.
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I think it's a very bad idea to use the same name as the business you sold. It doesn't matter if the business you sold only operates in CA--if a customer could reasonably confuse your business with the one you sold, then you are capitalizing off of the good will of the business you sold, which you are not allowed to do.
As for the logo, you should not be using any of the artwork. Just create something new. Again, you are walking into a lawsuit. Put yourself into the shoes of the other party here. If you bought a business and then you found out that the previous owner was using the same or a substantially similar logo with the same name, what would your reaction be? There is no need to be so close to the name and logo of your old business. You are asking for trouble if you do, and that trouble is so easily avoided by using another name and logo.
I realize this may not be what you want to hear, but it is an honest answer to your question, which is what you deserve.