A business name is a name that a company registers with the county or state. This is the name used for all legal documents, transactions, and business matters. Businesses are typically required to file with the state to operate legally; this includes filing the correct business name associated with the organization.

The requirements for filing business names may differ according to state laws and the type of organization that the company will be filing. For instance, the legal names of corporations must usually include the abbreviation “Inc.” or “INC” at the end of the name to signify that the business is a corporation. This may not be required for other business entities (such as partnerships).

Types of Business Entities

There are several different types of business structures. Each one offers certain benefits and drawbacks in management control, taxes, and possible liability on the part of individual owners or shareholders. If a person or group of individuals is setting up a business, they should acquaint themselves with the benefits and drawbacks of each kind of business entity.

It is essential to remember that the types of business structures are governed by state law, so each might have slightly different features in different states. When considering which structure to adopt for any particular business venture, it is essential to consult the state’s law in which the business is to be located.

There is one exception, and this is in the area of federal taxation. Of course, how a business is taxed for federal tax purposes is governed by federal tax law. State taxation will be governed by state tax law. Taxation under state law is another factor that should be considered.

Why Is a Business Name Required?

A business name is required primarily to distinguish the owner/operators of the business from the business entity itself. Businesses are regulated very differently from people regarding key legal issues like taxation, civil liability, and other areas of law.

For some businesses like limited liability companies, the business organization members are generally shielded from civil lawsuits. They cannot be held responsible for the violations of the company. In such organizations, the business name must be kept distinct from the individual activities of the members and owners.

Choosing An Appropriate Name for Your Business

You have decided to start your own business, and now you need to name it. Selecting an appropriate name for your business is crucial and may affect whether your business is successful.

Your business name should not only reflect who you are (your type of business, service, brand or merchandise, etc.) but also be distinctive, unique, and marketable. You want a name that people easily recognize and identify with your business. Therefore, choosing a business name is a decision that warrants much attention.

What Makes a Good Business Name?

While there is no straightforward answer to this question, there are several different types of business names that you should evaluate before deciding on a name. For instance, you may want to use your family’s name. The effectiveness of this strategy typically hinges on the reputation of the family’s name in the community and is often used to convey warmth, freshness, hospitality, and a homegrown atmosphere.

You may also want to create a wholly new or abstract name for your business. The benefits of creating an abstract name are that consumers will not have any preconceived thoughts or opinions about your business. By creating an abstract name for your business, you are essentially creating a blank slate from which consumers will be able to fill in the blank with their impressions and observations of their experiences. On the other hand, if your name is too abstract, consumers may not know your business and may instead opt for a business they recognize.

The solution to this problem is to create an informative name for your business. An informative name tells the consumer what your business is or does and immediately establishes an identifiable product for the consumer. The advantage of an informative name is that the more your name communicates to consumers what your product is, the less explaining you will have to do.

The reality is any name can be effective as long as you choose a name that will reinforce the key elements of your business.

What Other Factors Should I Consider in Choosing a Business Name?

Before finalizing a name for your business, there are some other factors that you need to keep in mind. First, you may consider applying for trademark protection for your business name. A trademark is used to differentiate one product and its manufacturer from another and stop another business from confusing clients by using your name.

You should also know if your proposed business name is available or if it has already received trademark protection from another business. To do this, you will need to conduct a trademark search. Likewise, if you intend on creating a website for your business, you will want to search for available domain names. The closer your domain name is to your business name, the easier it will be remembered and later located by customers. If a similar domain name is unavailable and you plan to create a website that will serve an essential function in your business, you may want to select a different name.

What If I Have a Dispute over a Business Name?

Disputes over business names can sometimes occur in the company’s business operations. Some types of business name conflicts can involve:

  • Filing for the same name: Most recording offices won’t issue a business name if another business is already using it. You may need to research local and state records to determine the availability of a business name before filing; this might require the help of a lawyer.
  • Unauthorized use: It can be a violation if one company uses another company’s name without authorization. This is often the subject of many types of trademark lawsuits and those lawsuits involving counterfeit goods.
  • Misleading names: Some business names can be misleading, meaning that they may cause the public to think that the product being marketed is associated with another brand. This is also a common source of trademark violation lawsuits.

Disputes over business names usually result in a damages award issued to the non-liable party. These are normally meant to reimburse the party for any economic losses they may have suffered from the improper or unauthorized use of a business name.

The court may require a company to stop using a particular business name in some cases. Thus, it’s very important to research and understand some of the basic rules while selecting a name for your business.

Do I Need a Lawyer for a Business Name Issue?

Selecting the right business name is important for the success of your company. You may wish to speak with a qualified corporate lawyer in your area if you need assistance with the laws covering business names and other matters.

Your lawyer can help you research to determine your options and represent you in court if you have a legal dispute over a business name. Use LegalMatch to find the right lawyer for your business needs today.