12 Tips for Naming Your US LLC or Corporation
Selecting a name for your limited liability company (LLC) or corporation involves more than just finding the ideal business name. It’s essential to verify that the chosen name aligns with the regulations of state laws governing LLCs or corporations prior to submitting your formation application.
This implies that the chosen name should not clash with any existing names recorded in the state’s business entity filing office. Additionally, the name should adhere to specific guidelines regarding permissible or prohibited terms.
If you’ve already established your LLC or corporation but wish to extend your business operations to another state, you must adhere to the naming regulations of that state when seeking authorization to conduct business there. Furthermore, there are alternative names that your corporation or LLC might utilize, such as DBA (Doing Business As) names, fictitious names, and domain names, which might play a role in your business’s naming procedure.
Outlined below are twelve factors to contemplate while choosing or altering your business name.
1. Your business is required to have a legal name for the official formation documents.
The legal name of an LLC or corporation is the formal designation utilized during the state filing process for the establishment of the entity. This name is documented on the formation paperwork, such as Articles of Incorporation or Certificate of Organization. It is imperative that this name adheres to the state’s stipulated naming criteria for businesses, both for LLCs and corporations.
2. It’s possible to possess a solitary legal name while maintaining multiple assumed names.
Your business is restricted to possessing just a solitary “legal” name concurrently. However, it has the freedom to adopt numerous assumed or DBA (“doing business as”) names. Consequently, if you possess alternative business name concepts, you can employ them as DBAs. For instance, if your LLC’s legal name is “Smith and Jones, LLC,” you could register a DBA to operate as “Best Painters” and an additional DBA to function as “World Wide Painters.” These DBA designations can be employed on your website, signage, advertisements, promotional materials, and other related platforms.
3. Your official business name needs to be unique and discernible.
The legal name of your LLC or corporation must be unique and different from the names of other entities registered with the state filing office. Failure to do so might result in the state rejecting your LLC or corporation formation documents. A similar requirement of distinctiveness applies in certain states when applying for an assumed or DBA name.
Nevertheless, in several states, assumed names do not necessarily need to be unique. This implies that multiple companies can potentially use the same assumed name.
4. Your official business name should incorporate the appropriate and obligatory terms.
States commonly mandate that the legal name of your LLC or corporation contains specific terms that indicate your business structure.
For Corporations: The name of a corporation usually needs to encompass terms such as Corporation, Incorporated, Company, or Limited, along with their corresponding abbreviations like Corp., Inc., Co., or Ltd.
For Limited Liability Companies (LLCs): The legal name of an LLC generally must involve terms such as Limited Liability Company, Limited Company, or their abbreviations such as L.L.C., LLC, L.C., LC, or Ltd. Liability Co.
5.Your official name must not include any words that are prohibited or restricted.
Numerous states also enforce restrictions on specific words within a business name. Some of these words are deemed inappropriate by the state, while others are meant to prevent the public from being misled. For instance, a state might disallow the use of the word “Insurance” in the name of a business that is not an actual insurance company, or it might mandate approval from the Insurance Department before permitting the inclusion of that term. Additionally, they prevent the use of words that imply a certain business structure that the entity does not possess. For example, a limited liability company would not be allowed to include the term “corporation” in its name.
6. Adhere to the regulations of other states in which you are authorized to conduct business.
For your LLC or corporation to become eligible to operate in states other than its state of origination (referred to as foreign qualification), its name must adhere to the legal stipulations of those foreign states.
In accordance with the majority of LLC and corporation statutes, the name of a foreign LLC or corporation needs to satisfy the identical legal prerequisites as domestic LLCs or corporations within that particular state. Moreover, if you intend to conduct business using an assumed or DBA name, most foreign states will necessitate the registration of that assumed or DBA name as well.
7. Opt for a fictitious name if the official name of your corporation or LLC is unavailable.
If you discover that the name under which your business is established cannot be utilized in a state where you intend to gain eligibility, you will usually need to choose and operate under an appropriate fictitious name (also referred to as an alternative name). This fictitious name must be specified in the application for authorization that you submit to qualify for business operations in that particular state.
8. Select a name that is easy to remember.
The name of your company holds significant value for any business owner. It serves as a tool for potential customers to remember you, locate you, and comprehend your offerings. It’s important not to make your business name overly cryptic to the point where customers can’t grasp its meaning.
This commonly happens when there’s pressure to secure a unique web domain name. Business owners might intentionally misspell or awkwardly structure the business name.
Strive to create a name that resonates with your industry or business. For instance, if you operate an online business, integrating your web domain name into your legal name might be beneficial.
However, this doesn’t imply the name must be overly descriptive—save that for your tagline or slogan. Instead, aim to stand out with a memorable, unique, and suggestive name that captures the essence of your business.
9. Perform a thorough search to check for existing trademarks.
Simply because a legal name is considered available according to the state filing office doesn’t guarantee that another company doesn’t hold trademark rights to that name.
State filing offices only review their own business entity filing records and don’t cross-check state, federal, or common law trademark databases when determining name distinctiveness.
Given the serious repercussions of trademark infringement, it’s crucial to verify that your chosen business name isn’t already protected. It’s equally important to ensure that other names you might use, such as assumed, fictitious, or domain names, won’t violate existing trademark rights. Conducting a trademark search is essential to uncover whether names or marks similar to the ones you intend to use are already in use. The U.S. Patent and Trademark Office provides guidelines on how to conduct a thorough trademark search.
10. Conduct a name verification process through the state.
It’s also important to carry out a name check with the state filing office to ascertain if your desired legal name is accessible within the state’s records.
Conducting this name check helps prevent the scenario where your incorporation or LLC formation documents are rejected due to the name being unavailable. It’s important to note that a name check only indicates the availability of the name at the moment of checking. It doesn’t secure the name for you or guarantee its availability. If there’s going to be a delay before you’re ready to submit your incorporation or formation documents, it might be wise to consider reserving the name. This takes us to the next point.
11. Secure additional time by reserving your chosen name.
If a desired legal name is available within a state, it’s open for anyone else to use as well.
However, in most cases, states offer the option to file for a name reservation, which safeguards your claim to that name for a specified duration. This timeframe is typically around 60 to 120 days, although the exact duration varies by state. Many states permit the renewal of name reservations.
During the period of name reservation, other companies are prevented from adopting, qualifying under, reserving, registering, or changing their name to the reserved name at that state office. If you’re establishing an LLC or corporation in one state but plan to conduct business in others, you can also apply for a name reservation in those additional states.
To secure your desired name through reservation, you usually need to correctly submit a name reservation application and pay any required state fees. Once the reserved name’s time period expires, it becomes available again in the state’s records.
If you’re contemplating future expansion into other states, you might want to consider name registration in those jurisdictions instead of name reservation. A name registration generally enables you to retain your legal name in a state even if you haven’t officially qualified to conduct business there yet.
However, this option is not offered by all states. Furthermore, many states that do provide this option usually make it exclusive to corporations, not LLCs. Typically, a name registration lasts for a year and can be renewed indefinitely as required.
12. When you decide to alter your legal business name, ensure that you adhere to the legal requirements stipulated by the relevant statutes.
You have the flexibility to modify your corporation’s or LLC’s legal name as often as necessary. However, the newly chosen name must still comply with the identical statutory prerequisites as the initial legal name. To officially implement the name change, you’ll need to submit a filing with the state. This filing typically involves either the submission of articles of amendment or a certificate of name change. If your corporation or LLC is authorized to operate in other states as well, you’ll also need to file an amendment or change of name with those states to notify them of the name alteration.
Conclusion
Indeed, choosing a name for an US LLC or corporation is more intricate than simply finding the right fit. It involves navigating statutory limitations, not only within your formation state but also across states where your business will operate. Ensuring your name’s availability is crucial, and a name reservation can buy you time to secure the name you want. In essence, the process involves careful consideration of legal requirements and strategic planning to make sure your chosen name is both compliant and available when needed.