Key takeaways:
A business name suggests so much to customers, employees, investors, and other stakeholders that businesses are right to give careful consideration to their names.
Effective entrepreneurs know that a well-considered name is important to conveying a memorable business image. They want their choice of name to describe their offering and strike the right tone.
Businesses will want to make sure they comply with the laws governing business entity names in all jurisdictions in which they operate. This article outlines steps to check and reserve your business’ legal name.
A legal business name is the official name that is registered with the state and appears on the business formation documents.
In the case of a sole proprietorship or general partnership, it is the name of the owner(s). A legal business name is used when communicating with federal, state, and local government, when setting up accounts with banks and other institutions, composing legal contracts, filing taxes, and so on.
A business can only have one legal name at a time and no other business in the same state can use that legal name if it has already been reserved or registered.
In contrast, a business can have more than one assumed or “doing business as (DBA)” names. However, not all states have protection rules for DBA names, so it is possible to have more than one business with the same registered DBA name.
A business can also change the legal name that’s on file with the state through an amendment filing.
For information on DBAs, see DBA: Doing business under an assumed name.
You should check that a legal business name is available for use before registering your business with the state.
Jurisdictions will verify that your new business name is unique when they process your formation documents. But you may want to make sure the name is available before you file to avoid denial of your entity’s formation or registration.
In the United States, the approach to checking business name availability can vary by state. Most states have online databases where you can perform a business entity name search. Some states don’t have databases, but they’ll accept written requests to check legal name availability via U.S. mail or by fax. There is also the option of using a business service provider to check company name availability.
Keep in mind that your business name may need to meet certain legal name requirements per state law, such as including specific designators (e.g., LLC, Inc.), avoiding restricted words, or being distinguishable upon state’s records from another business.
If your legal business name is available in every location you want to use it, that’s great news! But, checking availability won’t prevent another business from claiming the business name you want.
You can file a name reservation with most states to protect your right to that name over a short period of time.
A name reservation will also allow you to reserve the name you wish to use for future use if you are not ready to register your corporation or form an LLC. You may also take advantage of this option if you wish to change your legal name after having established a corporation or LLC.
To reserve your business name, you typically need to file for a name reservation with your formation state and pay any necessary fees. A business service provider can also handle the filing for you.
After the name reservation time frame expires, your reserved name becomes available again in the state’s records.
Trust our expertise
A name availability check only lets you know if the name you wish to use is available at that moment in time; it does not reserve the name for you. The name remains available for any other business entity to reserve. It is not uncommon for business owners to invest a lot of time and money on a name, only to find out later that another entity has taken the name.
A name reservation allows you to hold your preferred business for a length of time, which prevents other businesses from claiming it for themselves.
No. A legal business name must meet all eligibility requirements. Every state prohibits the use of certain words (which vary from state to state) as well as the use of names that are “deceptively similar” to an existing name.
Each filing office has its own rules for determining what makes one name distinguishable from another. For example, a name may be considered too similar to another if
Most states also require a legal business name include a term or abbreviation that identifies the business type (such as “Limited Liability Company”, “LLC”, “Corporation”, or “Inc.”).
You may be able to use a business name that is already registered in another state as long as you’re operating in a different state and the name does not violate trademark rules. The business name will also need to meet your state’s name requirements.
The reservation period for business names varies from state to state. Many states will allow entrepreneurs to reserve business names for a fee (typically for 120 days); most will renew your initial reservation for an additional fee.
Checking a name’s availability and then reserving it make for efficient and successful business formation filings because these steps ensure your chosen name remains available until filings are approved.
How CT can help
CT Corporation, the trusted, global leader in legal compliance solutions, acting as an extension of your business and helping you stay compliant in areas like business formation. Learn more about how CT Corporation can help with business naming and registration. Contact a CT Corporation specialist today.
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