The first important task in the LLC formation process is choosing a name for your limited liability company. You must consider a lot of important factors when choosing a business name, but one of the most important factors is whether the proposed name is available.
Choosing a company name that’s already taken by another company is obviously not an ideal situation for any business, and it’s even prohibited in most states. How do you know if a business name is taken? What do you do if the business name you want to use is already taken?
In this article I’ll explain everything you need to know to check if your business name is taken.
Why Should You Check Business Name Availability?
To legally form any type of business structure, whether it be a limited liability company (LLC), sole proprietorship, or corporation, you’re required to file legal documents with the state government.
One of the formation requirements imposed by the Secretary of State or other state agency in every state is that every new business must choose a business name that is distinguishable from the business names of already existing businesses in the state.
That’s a lot of legal jargon, but what does it mean?
You can’t choose the same name as another business entity. It can’t be too similar to another business entity’s name, either; it must be a unique name. There are many rules dictating what distinguishes one name from another. It’s not enough to use punctuation or special characters, plural or singular words, or conjunctions such as “and” or “&” to create a unique name.
There are also a number of restricted words that you can’t use in the legal name of an LLC. You can read more about the different rules involved in naming an LLC in my LLC Names and Examples article.
If another business entity has the same name or one that’s dangerously similar to yours, your formation application will be rejected, which is the last thing that any business owner wants.
You may also encounter legal trouble if you choose a business name that happens to fall under someone else’s trademark. Running a trademark search can ensure that you don’t infringe on someone’s trademark rights. It can also ensure that you won’t be asked to cease and desist using the name after you’ve been using it for some time and spent time and money on marketing and advertisements using the name.
How to Find Out If a Business Name Is Taken
The first thing you need to do when starting a new business is find out for sure whether your chosen name is taken. You can do this by performing an LLC name search.
In most states, the governing agency in charge of business formation is the Secretary of State, but that’s not true of every state. You’ll need to find out which state business agency you should report to. No matter which agency governs business formation in your state, most have an online business name database that you can use to perform a free business name search or LLC name search.
If you run an LLC name search and find that another business has a similar name, read up on your state’s company name requirements to find out if you need to choose a different name.
What If Another Business Is Using the Name I Want to Use?
If you’ve performed a name search and found that another business is already using the name you want to use, then that name isn’t available. If the name shows up as being used by another business and says something like “active” or “taken,” you can’t use that business name and you need to choose another name for your LLC.
Checking DBAs
Running an LLC name search isn’t enough.
Just because you can’t find any businesses with a similar name when you do a business name search doesn’t mean that there aren’t businesses using the same name. Sole proprietorships, corporations, and limited liability companies are allowed to use what is known as a fictitious name, trade name, assumed name, or “DBA” (“Doing Business As”) name.
In many places where businesses are allowed to use fictitious business names, they’re required to register the fictitious business name with either the county or city government. You can check these registration records to find out if there’s another business entity using the LLC name you want.
It’s important to know that even if these DBA names aren’t registered as trademarked names, they have common law trademark rights on the names.
Another thing to remember is that even if you can’t find trademark information about a name, if another business has been using that name for a number of years, they could have built up name recognition in their area, which would make marketing a nightmare for your own business.
Trademark Business Name Check
It’s possible for a business to get nationwide trademark protection. They do this by registering the entity name with the US Patent and Trademark Office.
If you’re trying to formally establish your business entity and choose a good LLC name, you should search the US Patent and Trademark Office’s database for business names that are similar to your LLC name.
Trademarked business names can cause legal problems for your business if your LLC name or corporation name is too similar. It can be especially bad if that company happens to offer a similar variety of goods and services.
If you use your state’s search tool and determine that the LLC name you want to use is too similar to that of a trademarked name, it’s a good idea to obtain business advice from a trademark lawyer before you proceed.
General Business Name Availability Searches
Owners of new business entities should perform an internet search to find out if the LLC name you want to use has already been used and whether it has developed a strong online presence.
A business that has already been using the name online may have let their name registration status run out with the Secretary of State but still maintain common law trademark rights. But no matter what, if they’ve purchased a registered domain name and created social media profiles using the same name as your LLC, it will make marketing for your LLC a lot more difficult.
Domain Search
It’s a good idea for any LLC owner to run a domain search as well. If other corporations or another LLC have registered a domain name that’s similar to your LLC name, it could make marketing more difficult for you in the long run, and may present problems at a later date. Of course, on top of posing marketing problems, you won’t be able to register that domain name for your LLC, either.
Sole Proprietors and Partnerships
Sole proprietors and partnerships have to go through a different process to register a business name.
Owners of a limited partnership or sole proprietorship don’t have to register their name reservations in the same way that LLC owners do. Instead, they use DBA names, fictitious names, or trade names. While an LLC can use a DBA name, it still has to file a name reservation form and have a legal name, as well.
Name Reservation
Once you’ve found a name that’s available and follows all the business naming rules in your state, the next step is to file a name reservation form.
You should file this form as soon as you’ve found the right name for your business. Whether you’re ready to take the plunge and form your LLC or not, most states will allow you to file a name reservation form to reserve the LLC name you’ve chosen for up to 90 days, and you can continually renew the reservation.
When you file a name registration form, the Secretary of State doesn’t permit other businesses in the state to use the name you’ve chosen. It’s important to note that unless you get a trademark, businesses in other states can use the name, too. In fact, if someone forms a sole proprietorship or partnership in your state they could use your business name as their DBA name, rather than their legal name, and it’s perfectly legal.
To keep other businesses nationwide from using your business name, you’ll need to read up on trademarks or get advice from a lawyer.
Conclusion
While choosing a name for your company is one of the most important aspects of LLC formation, it can be tricky. Business names are strictly regulated, and you can’t choose one that someone has already chosen and registered.
But it’s quite simple to find out if your business name is taken by performing a business name search on the Secretary of State’s business name database. If you’ve chosen a name that isn’t available, you’ll have to choose another one.
Once you’ve chosen a name that’s available, the next step is to file a name reservation form and then move on to the next step of the LLC formation process!
