One of the first and most important decisions you will make is the naming of your business. You may also identify specific names for products that you offer, either when you start the business or as they are developed along the way.
The name you choose must meet legal requirements, and it is also linked with the success of the business. The basic principle is that the name be distinct and does not infringe on a name chosen by another business, especially a competitor. Besides meeting federal, state and local regulations, a unique name that enhances your marketing initiatives will give you an advantage in generating sales.
Brainstorming and creativity—along with solid research—will give you the name you need to protect your business’s identity and avoid a potentially expensive conflict with another business.
Different Types of Business Names
The law distinguishes among different types of names that are used by businesses, and it is important to understand these differences:
1. Legal Name
When a business registers with the state, part of the process is to declare its legal name. This name will be used on all official filings and registrations.
Other terms for a business’s legal name might be “corporate name” or “registered name.” Depending on the form of business, states will require certain attributes and restrictions to the legal name.
2. Assumed Name
Have you ever seen the letters “dba” and wondered what they meant? The answer is “doing business as,” which shows that the business name being used is not the official, legal name of the business. Other terms for a “dba,” or assumed name, are “fictitious business name” or “trade name.”
EXAMPLE: The legal name of a business might simply use the name of the owner, “Robert Smith Corporation.” But Robert Smith might want to use a more descriptive business name for advertising and marketing reasons. He might select an assumed name, something like “Taco Treats” or “Tortilla to Go,” to get instant customer recognition.
The business owner will need to register his or her assumed name with the state and possibly with the county. Just as states require the use of “Inc.” or “Company” in an official corporate name, they usually do not allow those official designators in an assumed name.
3. Trade Name
A trademark, or service mark, registered with the United States Patent and Trademark Office can protect the name of the business or its product from use by others. There is no legal obligation to register the mark with the USPTO, but doing so has potential to avoid expensive and distracting efforts to protect valuable intellectual assets in the future.
How can I go about selecting just the right name for my business?
Picking your business name balances legal requirements with creativity and marketing. The first name you pick may have already been spoken for by another business. If you begin by brainstorming many different ideas, you have the best chance of identifying the perfect name.
One way to begin is by writing down all words that have something to do with your product. If you are starting a candy store, perhaps your list will include words like “sugar, sweet, honey.” You might have words like “happy” or “pleasant” or “smile”—the ways that your candy will make the customers feel.
What should I consider in picking a name for my business?
The name of your business might help people understand what your product or service is—something like “Candy Cottage.” Ideally it will be easy to remember, easy to spell and encourage customers to try what you have to offer.
Many corporations pay big dollars for consultants to come up with made-up names. The oil company, Exxon, is an example of that. Microsoft is a combination of two computer-related terms. You can try ideas like that when you are developing your ideas.
Some advisors suggest not using a person’s name or a location, but many successful companies use the founder’s name or the name of a city or region.
What do I need to do in choosing a legal name for my business?
When the new business is first registered with the state, it is automatically registered under its legal, or “registered,” name. At least part of the legal name will be regulated by the state and will depend on the form of business.
Do I need to choose a legal name for my business if it is set up as a sole proprietorship or partnership?
Since a sole proprietorship is legally an extension of the owner, it is presumed to operate under the owner’s name. If you want to operate the business using another name, file for an assumed name with the state and/or the county.
For a partnership, the business name will be made up of the last names of the partners. If the partners decide to use an assumed name for the business, they can do so by including the name in a written partnership agreement and making the proper assumed name filings.
What are the requirements for a legal name for a corporation or subchapter S corporation?
Most states require that the name of the business include an indication of the corporate status. “Incorporated,” “company” or “corporation”—or an abbreviation of one of these—are typical of those requirements.
Similar to a corporate name, states will require a business name that indicates the limited liability status. “Limited Liability Company” or “LLC” are common phrases.
Researching Business Names and Trademarks
The good news about researching a unique name for your business is that most of the search can be handled with a few clicks of your computer keyboard. The bad news is that there is no single spot to search; you will have to take several different paths to make sure your exploration is complete.
If you find a name that is so close to the one you have chosen that you sense you might need to defend your choice, start thinking of another one.
How do I research my business name?
Your state’s corporate registrar, usually the secretary of state’s office, is a good place to begin your search, since both legal names and assumed names will be registered with that office. Most likely, there will be a database available that you can search via the Internet.
To look at the national level on an informal basis, you can use search engines such as Yahoo!® or Google to try variations of business names you are considering.
Along those lines, test Web site names (URLs) that you would like to consider for your business. The results will tell you whether the name you are considering has been taken by another business, and they will tell you whether you can secure a domain name that aligns well with your business or product’s name. With the dominance of the Web in selling products and marketing, it only makes sense to make sure that the business name (1) is legally available, (2) will not infringe on other similar names and (3) can be used freely as the name for your Web site.
You can check domain name availability by using any of the many services who will sell the name to you along with hosting your Web site. A central source of information—including who owns domain names that have already been purchased—is http://www.whois.net.
How can I research trademarks?
You may decide to trademark the name of your business or products that you have developed. Before moving ahead, you will need to make sure the trademark is not already in use. This includes checking for trademarks which are registered—usually with a county or the USPTO—or unregistered, a mark which has not been formally registered but has validity due to continuous use.
Since states and many counties require trademark registration, you can search their databases to make sure your name, or one that is very similar, does not infringe on a name that has already been recorded.
Tip: Be sure to take advantage of the search function at the USPTO Web site: http://www.uspto.gov. You can also check a database of trademarks registered in all 50 states at http://www.trademark.com.
A search engine or the Thomas Register (online or in the library) may help turn up trademarks which are not formally registered.
Can I trademark my Internet domain name?
Some domain names can be trademarked, and others cannot. If a name is distinctive—such as eBay® or Google—it will probably qualify for trademark protection. A Web name that is primarily the name of a generic service—“housekeeper.com,” for instance—may not qualify.
It is possible to have a registered trademark and not be able to obtain a trademark for the domain name. For example, a business might have the name “housekeeper” in its trademarked name, along with many others, but it is possible that another business has already acquired the “housekeeper.com” domain name.
What if some business is offering to sell me the domain name I want, but it seems like the price is too high?
In some cases, you might benefit from a law called the ACPA. The Anticybersquatting Consumer Protection Act prohibits cybersquatting—registering a domain name with the sole purpose of profiting by the good reputation of a trademark already owned by another business.
You can also go to ICANN, the Internet Corporation of Assigned Names and Numbers. This organization sponsors an international arbitration system to deal with trademark infringements by cybersquatters.