No matter what type of business you are preparing to start, one of the first decisions you need to make is what you’re going to name your business. Choosing a name is often something that business owners don’t realize needs more research than just finding a name that is memorable and will appeal to both them and their clients.
Why go to all this effort? You’re opening your business with plans of success, knowing you will be investing yourself, your time, and your effort into growing your business. Generally, you won’t be notified of any disputes related to your name until your business has grown and become successful, after you have spent time and energy getting your name known. Don’t lose this valuable piece of your business when it really means something to you because you didn’t research whether you could use it at the beginning. Trademark litigation is costly; a search determining whether you name will be rightfully yours is not.
1. Type and Scope of Your Business
The type and scope of your business will normally define how much work needs to be put into research surrounding your proposed business name. For example, if your new business is going to be the local diner branding your name, with no plans to expand outside your neighborhood, that should justify sticking to just your city and county. If you’re planning on selling party supply goods through a mail-order or internet catalogue, that may call for a full scale search of local and national usage since you’re be selling nationally.
At a minimum, your search should include every county in which you plan to do business. At the other end, your search may end up involving a complex multi-jurisdictional search of other business names in various jurisdictions of trademarked or protected intellectual property interests.
2. Fictitious Business Names Registries
If your business is going to be a local one, check the fictitious business name registry with the county clerk for each county your business is likely to do business in. This includes counties you may expand to if your business will be a success.
3. Business Name Search with the Secretary of State
The California Secretary of State maintains a listing of certain business names. You can check their website with their search function to see if there is already a corporation, limited liability company, limited partnership or limited liability partnership with a name that is confusingly similar to what you are hoping to use. Picking a name that is confusingly similar to another registered name may lead to a protracted tradename dispute down the line.
4. Federal and State Registrations
Filing a fictitious business name required by California Business & Professions Code Section 17910 establishes a rebuttable presumption that the registrant has the exclusive right to use that name as a trade name in the county where the statement was filed.
What happens when there are two of you using a similar name? If you have a fictitious business name registration (a “dba”) and there is a corporation or limited liability company in the same county with a name similar to yours, whichever one filed first and is actually engaged in a trade or business using the name is entitled to the presumption of priority against the other.
5. Specific Entity Name Requirements
Q: If I’m not a corporation, can I put an “Inc.” or “Incorporation” or “Corp.” or “Corporation” after my name? A: No. You’re not allowed to use a name that may be confusing to the general public.
Q: What about “LLC” or “Limited Liability Company” for my sole proprietorship? A: No. Only a limited liability company can use “LLC” or “Limited Liability Company” or “LLC.”
You’re not allowed to pick a name for your business that will end up confusing people who look at your business name.
6. Reserve Your Business Name if There Will be a Delay in Filing Your Formation Documents
Reserving your name with the Secretary of State is a simple and inexpensive matter. Ideally, when you decide on a name after conducting the research I’ve described above, you should go through the effort of reserving with the Secretary of State. If you anticipate doing business in states other than California, reserve your name there as well. The Secretary of State will issue a certificate of reservation which should provide sufficient time to finish your business formation.
7. Will a Fictitious Business Name Statement Be Required?
A fictitious business name statement must be filed with the county clerk if you are regularly doing business under a fictitious business name (or a “dba”). You can file a fictitious business name statement in the county that your business has its principal place of business, within 40 days of the date you first began conducting business under that name. You may also wish to file a fictitious business name statement in other counties where you will transact business now and in the future.
Once you filed the fictitious business name statement with the county clerk, you must publish the name with a newspaper in the same county within 30 days of filing the statement, once a week for 4 consecutive weeks, with five days between each date of publication. Most metropolitan areas have papers that do this for a nominal sum. Afterwards, you must file an affidavit of publication with the county clerk within 30 days after completing your publication run. A fictitious business name statement will expire five years after the date you first filed it in the county recorder’s office, at which point you’ll need to refile.
We’d love to hear from you. How was your experience in filing your business name? Any other tips you can share?
-Elena Rivkin Franz, Business & Real Estate Litigation Attorney