How To Register and Choose A Business Name?

How To Register A Business Name. Photo KnowInsiders

What is a business name?

A business name is your business’s legal name. It is the official name of the person or entity that owns a company. And, it’s the name you use on your government forms and business paperwork.

A business’s legal name can vary depending on its type of business structure. If you operate as a sole proprietorship, your business legal name is your full name (e.g., Jason Williams). You can include other words along with your full name (e.g., Jason Williams Insurance Corporation). However, you must include your full personal name if you have a sole proprietorship.

If you are an owner of a general partnership, the business name is typically a combination of the last names of the partnership’s owners and must be included in the partnership agreement.

When should I register a business name?

You will need to register a business name if you carry on business and are not trading under your own name.

Exceptions to this include:

if you are operating as an individual and your operating name is the same as your first name and surname

if you are in a partnership and your operating name is the same as all the partners' names, or

if you are an already registered Australian company and your operating name is the same as your company's name.

The law does not allow any changes from the business holder’s name if you wish to rely on the above exemptions. For example, if your name is John Smith, and the name of your business is ‘John Smith & Co’, you will need to register the business name ‘John Smith & Co’.

If you are unsure about whether you need to register a business name, look through the examples in Regulatory Guide 235.

READ MORE: Top 10 Least Trusted Car Company In The United States

What a business name registration does not provide

Registering a business name does not provide exclusive ownership of your business name. It also doesn't prevent other people from being able to register and use similar names.

How to Register a Business Name

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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.

Tips For Choosing A Business Name

Photo Business dea

Your business name will be with you for a long time, so it’s important to carefully consider your choice before you invest in starting a business entity, setting up a website, and creating signs and other promotional materials. Here are some tips to get you started.

Follow Your State’s Naming Guidelines

If you plan to form a business entity such as a corporation or limited liability company, your state’s laws will restrict you from using a name that another business entity in your state is already using. In some states, you also can’t use a name that is deceptively similar to another business entity’s name.

Don’t Pick a Name That’s Too Similar to a Competitor’s Name

While you’re looking for a unique name, keep your eye out for competitors that are using names similar to the one you want. Avoid business names that could confuse your business and another similar type of business in your geographical area. For example, if there’s a “Blue Horizon Hair Care” in your town, you shouldn’t name your business “Blue Horizon Nail Spa.”

At worst, the other business could accuse you of trademark infringement, and you could find yourself fighting a lawsuit. But even if that doesn’t happen, you want your business to have its own brand and identity, and being confused with a competitor is seldom a good thing.

You can start your investigation by doing a general Internet search for similarly named businesses. You can also search the U.S. Patent and Trademark Office database for names that have been registered as trademarks. When you’re searching, be sure to check alternate spellings and abbreviations.

Make Your Name Web-Friendly

Chances are, you’ll have a website and Facebook page for your business. Your business may also be active on other social media platforms. Do your research and find out if you can get a domain name that matches your business name, as well as social media accounts in your name.

For domain names, simple and memorable is best. An unusual spelling or a long name may sound great to you, but it can make it harder for potential customers to find you online or type your name accurately in an email.

Be Memorable But Not Too Unique

Ideally, you’ll be able to get trademark protection for your business name. But for small businesses, that can be tricky.

Generic or geographical company names like “Best Plumbers” or “Chicago Pizza” may be great for attracting customers, but they can’t get trademark protection. On the other hand, the names that create the strongest trademarks are made-up of names like “Xerox,” which can leave a small business’s potential customers scratching their heads.

Try to strike a balance by choosing a name that’s unique and creative but still describes a quality of your business.

Pick a Name that’s Consistent With Your Brand

What distinguishes your business from its competitors? Is it a convenient location? Large selection? Great customer service? Knowledge and expertise? Who’s your ideal customer or client?

Before choosing a business name, figure out what you want to be known for. And then choose a name that reflects that quality. “Speedy Car Wash” and “Velvet Touch Car Wash” describe the same type of business, but they convey different images and appeal to different clientele.

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