After choosing a business name for your new company, you will want to register it to prevent others from using it. There are several ways to accomplish this.
Determining the best way to register a business name will take into consideration several factors, such as the business structure, the geographical area in which the company will operate, and the extent of protection needed.
How to Register a Business Name
The three ways a business may register a name are:
- Form a business entity, such as a corporation or limited liability company (LLC).
- Register the business name as an assumed name or DBA ("doing business as").
- Register the business name as a federal trademark.
Not all businesses can use all three of these methods, and some may use more than one.
The choices may vary depending upon whether the business is structured as a sole proprietorship, some form of partnership, an LLC, or a corporation.
To illustrate the possibilities, we will explore the various options of a fictional business. In our example, Robert Hansen opens a residential home rental business after buying one house for this purpose. He begins by operating as a sole proprietorship and uses the name "Robert Hansen, Property Rentals" for the business. In time, Robert acquires more properties and decides he wants a new name for his business.
Forming a Business Entity
One option for Robert is to create a corporation or an LLC. To do so, he must file certain registration documents with the appropriate state agency. This requires the business to choose its legal name.
State laws prohibit a company from using a name that is already being used by another company. So, part of selecting a name involves checking the state's records to be sure another company is not already using the desired name.
Robert wants to use the name "Sunrise Properties" and determines that name is available. He might file articles of incorporation under the name "Sunrise Properties, Inc." Or, he might file articles of organization under the name "Sunrise Properties, LLC." This would prevent other companies from using the name "Sunrise Properties" in his state.
Creating a corporation or LLC only provides protection in the state of registration. If Robert decides to expand into another state, he may be able to register his corporation in the new state, providing the name is not already registered there.
Registering an Assumed Name
Any sole proprietorship, partnership, corporation, or LLC that does business under a name other than its own, must register the other name as an assumed name.
This is often done with a county agency, but may be with a state agency in some states. This is called a fictitious name in some locations and is also commonly referred to as a "doing business as" or "dba" name.
If Robert wants to continue operating as a sole proprietorship, he may be able to register the name "Sunrise Properties" as an assumed name. Robert could then use the name "Sunrise Properties."
Anyone checking the official records would be able to see that his business is actually "Robert Hansen dba Sunrise Properties."
Assumed name registration is not limited to sole proprietorships. Let's suppose Robert forms Sunrise Properties, Inc., and decides to start a yard maintenance business that uses a different name. In this case, Sunrise Properties, Inc., might register "Sunrise Lawn Services" as an assumed name. This would then be "Sunrise Properties, Inc., dba Sunrise Lawn Services."
Instead of forming a corporation or LLC, let's suppose Robert takes on Laura Deever as his partner. Their partnership might register "Sunrise Properties" as their assumed name. Or, for another example, they might combine their surnames and register "Han-Dee Properties."
Assumed name registration usually only protects the name in the county where it is registered. If the business plans to operate in more than one county, registration would be required in each county.
Trademark and Trade Name Registration
Trademark, trade name, or service mark protection may be available on a statewide basis. The requirements for registration vary from state-to-state. Such registration must be done in each state where the business operates.
A more complex, and usually more expensive, way of registering a business name is by registering the name as a trademark with the United States Patent and Trademark Office.
This provides nationwide protection of a business name. Federal trademark registration requires a search to be sure a similar name hasn't already been trademarked, and there are detailed requirements and limitations relating to the ability to trademark a business name.
Determining the best way, or ways, to protect your business name will take into account the way you decide to structure your company, the type of goods or services you offer, and the geographical range of your business operations.
For many small companies operating in only one state, organizing as a corporation or LLC may provide sufficient protection.