Hello there, My business partner and I are in the process of buying a business.…
When Esso Oil decided to change its name, it reportedly spent over $100 million coming up with its new name : Exxon. For $50 million, I could have come up with that name and saved them half 😉 The point is, while you’re not likely to spend $100 million, naming your new business is a very important decision. In additional to the right name, there are a few legal requirements for naming an LLC that you need to keep in mind.
You LLC’s Business Name Must Be Unique In Your State
This part is relatively simple. You cannot have two companies with the same name in the same state. The easiest way to determine if your name has been taken is to do a search on state’s Secretary of State page for business records. This will bring up any businesses that the same name as yours. Another point to remember is that your LLC cannot have the same name as another business that is a C-corporation (i.e. has an “inc.” after its name). That if there is already a “Best Buy, Inc.” in your state, you cannot create “Best Buy, LLC).
Your LLC Name Cannot be Confusingly Similar to Another Business
This criterion is somewhat more subjective than above. What does “confusingly similar” mean, exactly? Some would say it means whatever the particular judge or jury says it does, after you’ve been sued for trademark/tradename dilution, unfair competition, and a lot of other scary-legal sounding things. The real answer is that it’s obvious that you’re naming your LLC such that the public will confuse your company with a better known company in order that you take some of their business, then it’s possible that your name is confusingly similar. The two main criteria for confusingly similar names are: 1. Similarity of name. 2. Similar markets. If you adopt a name very similar to a direct competitor in the same market, then you are likely to face charges of having a confusingly similar name. If, however, your name is similar to another company’s name (but not identical), and you serve totally different markets, then you are probably alright. When in doubt, pick another name. Unless you enjoy dealing with lawyers and lawsuits and getting cease-and-desist notices.
LLC Specific Naming Requirements
The fact that your business is an LLC also imposes requirements on your company. While each state has slightly different requirements for LLCs, the general requirement is that your business name must end in one of the following:
- Limited Liability Company
- Limited Company
Further, your LLC name CANNOT use terms such as:
Reserving Your LLC Name
Suppose you are not yet ready to file your Articles of Organization, but have the perfect name picked out and don’t want to lose it.
Fortunately for you, each state has its own procedures for reserving an LLC name. It consists of filing a form along with a filing fee (the amount of the fee varies by state). The length of time you can reserve a name for varies state by state.
Legalzoom offers entity name reservation for the low price of $49 + state filing fees. After purchasing the name reservation service, Legalzoom will remind you when you must fully form your LLC before the name reservation expires.