You have a great business idea, a killer business plan and now, as you wait your turn to see the loan officer you realize that you need a great name to go with it. Creativity under pressure can, and has, yielded great results, but you can’t count on it. Like everything else associated with your new business, the name you give it takes thought and planning. In fact, it is something you should have been working on since Day One.
There are a number of issues that arise when you are considering your company name. You need to decide whether or not your trade name will be the same as the full legal name of your business. Beyond that want something that is short, easy to remember, descriptive and capable of drawing attention. On the other hand, your name must not be misleading, or in any way imply something that your business is not. After all, this is a big part of your branding. Beyond these basics it becomes a bit more complicated since you must also take into account your business structure and whether your great idea for a name will somehow infringe on the rights of someone else’s business name.
Business Structure and Your Name
Your business name, how it is presented and the various rights associated with it are controlled to a great extend by your business structure. Each kind of business—sole proprietorships, partnerships, limited liability companies, C-corporations, S-corporations and professional corporations—has its own rules and practices. According to The Business Owner’s Toolkit, here is how they each break down:
Sole proprietorships . Sole proprietorships are presumed to operate under their owner's name. If the business will operate under a different name, most jurisdictions require that a fictitious owner affidavit be filed. A fictitious owner affidavit, or a "doing business as" (DBA) filing, informs the local government and the public that the business is operating under an assumed name and indicates who the owner is. The fictitious owner affidavit usually has to be filed with the county recorder of deeds' office rather than the secretary of state's office.
Partnerships . Similar to a sole proprietorship, a partnership is presumed to be operating under the name of its partners. If the partnership is going to operate under a different name, a fictitious owner affidavit is required. A fictitious owner affidavit is usually filed at the county recorder of deeds' office but may have to be filed with the secretary of state's office. A fictitious owner affidavit informs the government and the public that the business is operating under an assumed name and indicates who the owner is.
Limited partnership . Choosing a limited partnership name involves more formalities than choosing a sole proprietorship or partnership name. A limited partnership name has to be reserved with the secretary of state's office. The name is usually reserved when the limited partnership files a certificate of limited partnership with the secretary of state's office to register its existence. The name of the limited partnership must include the words "limited partnership," the letters "L.P." or some other phrase indicating that the entity is a limited partnership. Most state statutes specifically identify which descriptions can be used.
Limited liability companies . Like choosing a limited partnership or a corporation name, choosing a limited liability company name is a formal process. A limited liability company name has to be reserved with the secretary of state's office. The name is usually reserved when the articles of organization are filed with the secretary of state's office to register the limited liability company's existence. The name of the limited liability company must include the words "limited liability company," the letters "L.L.C." or some other phrase indicating that the entity is a limited liability company. Most state statutes specifically identify which descriptions can be used.
Limited liability partnerships . Limited liability partnerships are similar to limited liability companies in terms of the tax advantages, but they differ in that limited liability partnerships are normally available only to select professions, such as doctors or lawyers. They're also recognized in fewer states than are limited liability companies, with only about 40 states now recognizing them.
Corporations . Choosing a name for a corporation is a formal process, just as it is for a limited partnership or a limited liability company. A corporate name has to be registered with the secretary of state's office. The corporate name must be unique and not be in use or reserved for another corporation. If the corporate name you choose is already in use when you file your articles of incorporation, the secretary of state's office will reject your articles of incorporation. You can call the secretary of state's office to find out in advance whether a particular name is available. Or if you have access to certain online services like Lexis/Nexis, a legal research database, you can electronically search your state's database of names to see which names are available. The name of a corporation must include the words "corporation," "incorporated," "limited" or "company," the letters "Inc.", or "Corp." or some other phrase indicating that the entity is a corporation. Most state statutes specifically identify which descriptions can be used.
S-corporations . S corporations are subject to the same name rules that a regular corporation is subject to. An S corporation does not have to indicate its status as an S corporation in its name. An S corporation's status as an S corporation only has to be identified when the corporation is filing its federal income tax return, and, in some instances, when the corporation is filing its state income tax return.
Professional corporations . Professional corporations are generally subject to the same name rules that apply to corporations with one exception. Instead of indicating its corporate status with an "Inc." or other corporate designator, a professional corporation must include the words "professional corporation," the letters "P.C." or some other phrase indicating that the entity is a professional corporation. Most state statutes specifically identify which descriptions can be used.
Name Searches and Registration
Assuming you have chosen a business structure that requires you to register your trade name, You should first use the US Patent and Trademark Office (USPTO) online system to search all state and federal trademark registers to see if your proposed name is being used. Once you have determined that your name is free and clear, you can register it locally through your state's Secretary of State office, and with the USPTO for more widespread marketplace protection.
Internet Domain Names
When you think of a company domain name, you usually think of the company name since for most businesses the two are synonymous. Like the overall name of your company, your domain name is a part of your branding and you want it matched with your company name as closely as possible. However, if you cannot have your business name for your domain name, the same rules apply—short, descriptive, easy to remember—that applied when you chose your business name.
Yes, if you cannot have it. That is something you ought to be prepared for. Domain names are not registered through federal, state or local government as are corporate names; they are purchased through numerous online businesses—web hosting services, or a company like Domain.com—and the unhappy truth is that your preferred domain name might already be owned by someone else. You will make a search through, say, the web hosting service, and if it comes back clear, then the domain is yours. If it comes back that someone else owns that domain, you will have to come up with something else and try again.
Choosing a business name, you can see, is a bit more than just coming up with something that sounds good. A lot of work and thought go into it, but if you do it right, you will have an effective name that’s good for you and your brand.