By: Brad Nakase, Attorney
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Theodore has always been a great baker, ever since his grandmother from Tennessee taught him how to make chocolate chip cookies as a kid. Growing up, Theo worked on honing his baking skills until he was just as good, if not better, than Nana. After finishing cooking school in Paris, Theo decides to open his own bakery in Los Angeles. He wants to sell his cakes, pastries, and cookies to the local community and make a name for himself. When it is time to choose a name for his business, Theo feels sentimental. He decides to call the bakery “Nana’s,” after his late grandmother. In order to advertise his business before he gets it up and running, Theo gives out free samples throughout Los Angeles. He even goes viral on TikTok for Nana’s rainbow cake recipe. Unfortunately, Theo gets a notification soon after from a restaurant in San Francisco also called Nana’s. The name, he is sad to discover, has been reserved for use. Heartbroken, Theo realizes he will have to come up with another name. This time, he wants to make sure he knows how to register a business name properly, so that he doesn’t face disappointment again.
When an owner names his or her business, he or she must file the name with the state in which they are operating. There are several steps to registering a business name.
Let’s review them.
When a business owner is thinking of a name for his or her company, it is important that the prospective name be unique in nature. This means that no one else in that state can have a company with that name. It also means no one can have reserved that name for use. But how does one go about checking availability of a name?
There are a few ways to do this.
One of the ways to check if a name is available is by performing a business entity name search. This can be done by going on to the state’s Secretary of State website. This is an important step, because if one files a name that has already been taken, one’s application will be denied.
A unique and available name is necessary for LLCs and corporations, but depending on the state, requirements may be different for other business structures. For instance, in some states, a name search is not necessary for sole proprietorships and general partnerships.
It would also be a good idea to see if one’s business name is available as a web domain (URL). Even if an owner is not ready to get a web domain yet, it is still good practice to check to see if the name is available and to buy it anyway. This way, no one else can acquire the domain name. It is free to search the availability of domain names using services like GoDaddy.
By using the U.S. Trademark Electronic Search System, a business owner can see whether someone else has already trademarked a name. If the name in question is available, then a business owner should consider applying for a trademark. That said, sometimes the cost of a trademark is too steep for a beginning business or startup.
To check to see if a name is taken, a simple internet search is also recommended. One can search the prospective name on Google, Bing, Yahoo, Facebook, Yelp, Twitter, Instagram, Reddit, and more. These searches will reveal who else is operating in your space, how big their customer base or following is, and how tough a competitor they might be when building your brand. If someone has the same name as your company, then you can pick a different name to stand out from the crowd.
Once a business owner selects a unique name, the next step will depend on what type of entity the business becomes. Different business structures have different naming rules.
Let’s review some the naming requirements for different business structures.
A limited liability company, or LLC, is a great business structure when it comes to protecting personal assets in the event of a lawsuit. LLCs need to have unique names that meet certain requirements. Here are some of the common requirements for naming LLCs:
A corporation is a legal entity that is separate from its owners. Its structure consists of shareholders, officers, directors, and employees. One may consider becoming a “C corporation,” which, like an LLC, will protect an owner’s personal assets in the event of a lawsuit. Corporations need to have a unique name that meets certain requirements. Here are a few of those guidelines:
A sole proprietorship is the most basic business structure. It is informal, and it doesn’t provide personal asset protection. It does not need to be filed with the state. The business structure has to operate under the surname of the owner, and the owner must file for a DBA (Doing Business As).
Though similar to sole proprietorships, general partnerships consist of two or more people. It is an informal structure that does not offer personal asset protection in the event of a lawsuit. General partnerships need to include the surnames of all partners. If they want to use a different name for the business, then the owners need to file for a DBA (Doing Business As). This is an assumed name.
Depending on the particular state, it may not be necessary to file a name reservation to open a new company or file for a DBA. That said, there are advantages to reserving a name. For instance, an owner may decide on a unique name but is not ready to form the LLC or corporation yet. In this case, he or she could file a name reservation to make sure no one else takes the name.
When forming an LLC, registering a name plays a part in the process. Once the LLC is filed with the state, the name is automatically registered. How does one form an LLC? The steps can be simplified to the following:
Similar to an LLC, registering a business name is part of the incorporation process. When a corporation is filed with a state, the name is automatically registered. How is a corporation formed? Again, the steps can be simplified to the following:
By filing a DBA (Doing Business As), an owner can do business by a name other than the legal business name. This is useful if one wants to establish a brand name. It can also be a useful way of changing the name of a business without having to file an amendment.
If one wants to go the official route of changing a business’ name, then he or she will have to file the relevant state’s certificate of Amendment. This comes with a filing fee.
