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There's more to naming your LLC or corporation than picking the perfect name for your business. You must also make sure that the name you decide upon is available for use in a state’s business entity records; that it isn’t already “taken,” or in use by another business before you file to form your LLC or corporation. Plus, the name must meet other state requirements. If you’ve already formed your LLC or corporation, but want to expand your business in another state, you’ll have to satisfy the other state’s naming rules when you qualify to do business there. Here are 3 points to keep in mind when you’re selecting or changing your business name.
CT Tip: A company name is a valuable asset that helps customers remember you, find you, and understand what you do. Aside from the state business entity naming rules discussed here, you might also want to consider trademark rights and protection—which provides businesses with a different kind of name protection—it essentially allows one business to prevent others from using its name or mark.
An LLC’s or corporation’s legal name is the official name used when you file with the state to form your LLC or corporation. It appears on your formation documents (e.g., Articles of Incorporation or Certificate of Organization.) This name must meet the state’s business entity naming requirements for LLCs and corporations.
CT Tip: Your business can have only one “legal” name at a time. But, it can have any number of DBA (doing-business-as) names at the same time. For example, if your LLC’s legal name is “Smith and Jones, LLC,” you could file a DBA (doing-business-as) to do business in the community as “Best Painters.” You can use this name on your site, signs, ads, promotions, etc.
The legal name of your business must be distinguishable from the names of other entities on record with the state. Otherwise, the state may refuse to file the documents to form your LLC or corporation.
CT Tip: Each state varies in how it decides whether a name is different enough to be distinguishable (and acceptable for filing) or is too substantially similar to others already on record (and not acceptable).
Also, states generally require that the legal name of your business includes certain words indicating your business structure. For example:
Many states also prohibit certain words in a business name to protect the public from being misled. For example, a state might not allow “Insurance” in the name of a business that’s not an insurance company.
With a name check, you can determine if your preferred name is available in state records or is already in use by another business. Doing a name check helps prevent a state from rejecting your documents because the name isn’t available when you try to incorporate. But keep in mind, a name check simply tells you that the name is available at the moment you perform the check. It does not “hold” the name for you or guarantee that you’ll have it. If you there will be a period of time before you are ready to submit your incorporation or formation documents, consider taking advantage of a name reservation.
If your preferred name is available in a state, it remains available for anyone else, too. However, most states let you file a name reservation to protect your right to use that name for a period of time. A name reservation usually lasts 60 to 120 days, but the duration varies by state. Many states allow you to renew the reservation.
CT Tip: Name reservations allow you to reserve your preferred business name for future use if you are not yet ready to incorporate or form your LLC. They also come in handy if you’ve already incorporated and then you want to change your legal name.
While your name reservation is in effect, another business may not use the name you’ve reserved. This helps prevent other companies from forming under, qualifying under, reserving, registering, or changing their name to your reserved name with that state office. If you incorporate in one state and plan to do business in other states, you could take advantage of a name reservation in the other states as well.
Reserving your desired name typically requires properly filing a name reservation and paying any state-imposed fee for doing so. Once your name reservation time frame expires, the name you had reserved becomes available again in the state’s records.
If it will be months or years before you’ll expand into the other states, consider a name registration in those states (instead of name reservation). A name registration generally allows you to preserve your legal name in a state even if you haven’t yet qualified to do business there. However, unlike name reservations, not all states provide this option. And, many that do, only provide it for corporations, not LLCs. A Name registration, where available, generally lasts for a year and can be renewed indefinitely.
As you can see, selecting your business name goes beyond thinking of the perfect one. In some cases, you may want to take advantage of trademark protection or place it on your to-do list. In any event, it’s best to check your name’s availability with a state. And if you need some time, a name reservation helps ensure your name will be there for you.
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