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.
What is a business’ “legal name”?
A business’ “legal name” appears on its formation documents. It’s the name businesses use 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.
The legal name is the one in use when a business is first formed. A business has the right to change its legal name.
A business can only have one legal name at a time, and no other business can choose the same legal name wherever another business has already reserved or registered it.
In contrast, a business can have several, “doing business as (DBA)” names at once, which remain unprotected.
For information on DBAs, see DBA: Doing business under an assumed name.
How do I check a business name's availability?
You’ll need to check that the name is available for your use. Jurisdictions will verify that your new business name is unique when they process your formation documents.
However, you may want to make sure the name is available sooner than that — before you even file — to avoid denial of your new entity’s formation. In the United States, the approach to checking legal business name availability varies by state. Most states have online databases you can search. Other states don’t have databases, but they’ll accept requests to check legal name availability via U.S. mail.
Do I need to reserve my business name?
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.
How do I reserve a business name?
To reserve your business name, you typically need to file for a name reservation with your formation state and pay any necessary fees. After the name reservation time frame expires, your reserved name becomes available again in the state’s records.
How is a name reservation different from a name availability check?
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.
Can any name be reserved?
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
- One name is singular and the other is plural
- One is in uppercase and the other lowercase
- The names have different entity indicators or domain name extensions
- The names differ in punctuation, geographical terms, or symbols.
Most states also require a name to identify its business type (such as “LLC” or “Inc.”).
What if my business name already exists?
You may be able to use the same business name in your own state or another state if it is not in the state where the business name is filed and it does not violate trademark rules.
How long can my name be reserved?
The reservation period 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.
Conclusion
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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