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Selecting a business name is one of the necessary first steps for anyone starting a small business. It’s nearly always the first item of information requested on articles of incorporation or LLC formation documents. Shakespeare’s line, “A rose by any other name would smell as sweet,” may be true for a flower, but it’s definitely not true for a business.
Your name is your brand—the essence of your business; your identity in the marketplace Finding the right name can help your business grow, while a poor choice can limit your potential. Your goal is a memorable and unique business name that captures a potential customer’s attention. In order to help you make the best possible choice, here are three questions you need to explore when considering business formation.
In addition to the plain meaning of the term, you need to consider connotations of the words. Be wary of commonly used superlatives (Best Plumbing) or bland descriptors (All-Pro Services). That said, be careful about being too specific about what you do or where you are located. “Kentucky Fried Chicken” became “KFC” as its menu and locations expanded. Renaming a company is costly—both in terms of hard costs (new signs, marketing) and soft costs (customer goodwill). It’s better to think big, and name accordingly. Once you have a number of good candidate for your business name, it’s time to face the next question.
It is a rare company that does not need an online presence in today’s economy. In fact, a compelling argument could be made that every company must have some type of online strategy. Because you will want to be online, take the time to determine if your name is already in use on the Internet and on the social media channels you will want to use.
Checking for web name availability can be as simple as plugging your desired name into a search engine to see if your desired name shows up as someone else’s business. If you don’t spot a problem, the next step is to check whether your name is available as a domain name by using the WHOIS database of domain names. If your name is available, you can reserve it easily online. If not, then then the WHOIS search results will offer a list of similar names that are available.
You will also want to create a Facebook page for your business that incorporates your business name. You will also want to create your other social media pages and handles.
But, before you jump to claim your web domain or your social media identity, you need to consider the final question.
You will want to establish your business as a formal state entity in order to enhance your credibility, to protect your assets and to engage in tax reduction strategies. Therefore, you will want to select a business name that is allowable and available in the state where you will form the entity. If you plan on expanding into other states—or if you plan to incorporate in a state, such as Delaware, you will need a certificate of authority to do business in a new state. Therefore, you should check to see if your desired name is available in those states as well.
Each state has its own nuances regarding allowable names. Most states will require that you identity the type of entity in the name. Many prohibit the use of certain words in a name. (A common prohibition is the term “bank,” unless the business is a bank.) Even if your name is allowable, it might not be available for you to use. Every state prohibits a new entity from using a name that is deceptively similar to a name that is already in use. In some states, this check in made only within entity types, others ban similar names across entity types.
Checking the Secretary of State website to see if a name is available will give you an idea of whether you can proceed with a name. However, in order to guarantee that the name is available when your formation documents are filed, you will want to file a name reservation. The name reservation service is included when you partner with CT to form your entity. (This is also available as a stand-alone service, if you are still in the early planning stages of your business.)
By answering these three questions, you will be better able to come up with a name that you, and your customers, will love and that will serve your business well for many years to come.
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