Choosing the Business Name

Choosing the Business Name

The first thing to do before starting a corporation is to thoroughly check out the name you wish to use to be sure it is not already being used by someone else. Many businesses have been forced to stop using their name after spending thousands of dollars promoting it.

Corporate Records

The first place to check is your Secretary of State's office to see if the name has already been used by another corporation in your state. To do this, you can write or call their office. In some states, you can access your state's corporate records through the Internet and conduct your own search of all current and dissolved corporations.

Besides checking corporate names, you should check if another business is using the name you want as a fictitious name. In some states these are registered with each county and in others they are registered with the Secretary of State. Some states that register the names with the Secretary of State can be searched over the Internet as described above.

Note: The fictitious name search may be separate from the corporate name search.

Since some businesses neglect to properly register their name (yet still may have superior rights to the name) you should also checkĀ  online business directories.

To be sure that you are not violating a registered trademark, you should have a search done of the records of the United States Patent and Trademark Office (PTO). Go to www.uspto.gov and click on the "Trademarks" button. Click on "Search Trademarks," which will take you to the Trademark Electronic Search System (TESS).

Name Reservation

It is possible to reserve a name for a corporation for a certain period of time by filing a reservation form and paying the appropriate fee. However, this is usually unnecessary because it is just as easy to file the Articles as it is to reserve the name. One possible reason for reserving a name would be to hold it while waiting for a trademark name search to arrive.

Fictitious Names

Since a corporation has a legal name, it does not need a fictitious name, but corporations may operate under a fictitious or assumed name just as an individual can. This is done when a corporation wants to operate several businesses under different names or if the business name is not available as a corporate name. Fictitious names are either registered in each county or are registered statewide with the Secretary of State. However, registering a fictitious name does not give the registrant any rights to the name. While corporate names are carefully checked by the Secretary of State and disallowed if they are similar to others, in many states fictitious names are filed without checking and any number of people may register the same name. The cost of registering a fictitious name varies.

Note: When a fictitious name is used by a corporation, the corporate name should also be used. This is because if the public does not see that they are dealing with a corporation, they may be able to pierce the corporate veil and sue the stockholders individually. Thus, all signs, business cards, etc., should list the names in one of the following ways: Smith Enterprises, Inc. d.b.a. Internet Resources or Internet Resources, a division of Smith Enterprises, Inc.

Sometimes it seems as if every good name is taken. However, a name can often be modified slightly or used on a different type of product or service. Try different variations if your favorite is taken. Another possibility is to give the corporation one name and then do business under a fictitious name.

Example: If you want to use the name "Flowers by Freida" in Pensacola and there is already a "Flowers by Freida, Inc." in Miami, you might incorporate under the name "Freida Jones, Inc." and then register the corporation as doing business under the fictitious name "Flowers by Freida." Unless "Flowers by Freida, Inc." has registered a trademark for the name either in Florida or nationally, you will probably be able to use the name.

Note: You should realize that you might run into complications later, especially if you decide to expand into other areas of the state or other states. One protection available would be to register the name used on your goods or services as a trademark. This would give you exclusive use of the name anywhere that it was not already being used.

A corporation may not use certain words in its name if there would be a likelihood of confusion. There are state and federal laws that control the use of these words. In most cases, your application will be rejected if you use a forbidden word. If you use a word that is forbidden, your papers will most likely be returned. You may wish to call the corporate registrar to ask if the name you plan to use is allowed.

Trademarks

The name of a business may not be registered as a trademark, but a name used on goods or to sell services may be registered, and such registration will grant the holder exclusive rights to use that name except in areas where someone else has used the name. A trademark may be registered both in your state and in the United States Patent and Trademark Office.

Each trademark is registered for a certain class of goods. You may usually register the name "Zapata" chewing gum even if someone has registered the name "Zapata" for use on shoes. One exception to this rule is if the name is so well known that your use would cause confusion. For example, you could not use "Coca-Cola" as a brand of shoes, because people are so familiar with the Coca-Cola company that they might think the company started a line of shoes. If you want to register the mark for several types of goods or services, you must register it for each different class into which the goods or services fall, and pay a separate fee for each category.

For protection within each state, the mark may be registered with each state's appropriate department handling trademarks or an online trademark registration service. The cost varies from state to state. Application forms and instructions can be obtained through the same department.

For protection across the entire United States, the mark can be registered with the United States Patent and Trademark Office. The procedure for federal registration is more complicated than state registration and is beyond the scope of this guide. Visit the PTO website at www.uspto.gov for more information.

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