A company name is usually the name by which a company conducts business publicly for commercial purposes. It is also called a “trade name” or “trading name.” It may be different from a company’s legally registered name, which is used for contracts and other official business documents.
It is important to choose a name that reflects the brand identity of the business and aligns with the products and services that the business offers. Once an appropriate name has been selected, it needs to be protected legally. This entails registering the name. Most states have extensive information on their state government websites regarding business formation, including the state’s requirement for registering business names. State government websites may also help a business start-up conduct a search to ensure that no other business is using the name it prefers in that state.
There are four ways to register the name of a business and each one serves a unique purpose.
- Entity name: registering an entity name protects a business name at the state level. Depending on the nature of the business and the state in which it is located, registration of an entity name may be required. Usually, a business cannot register a name that is already in use; registration protects the name from being used by other entities. Rules regarding the registration of entity names vary from state to state so a business must determine the law in the state in which it resides;
- Trademark registration: trademark registration of a business name protects a business at the federal level. Trademark registration prevents other businesses from using the names that have been registered. Trademarks are registered with the U.S. Patent and Trademark Office, an agency of the federal government;
- “Doing business as”: registering a name at the local level as a “doing business as” (DBA) name does not provide any kind of formal legal protection for the name. However, certain local government entities, e.g. city or county governments, require it. A DBA might also be known as a trade name, fictitious name or assumed name depending on the locale where a business operates. A business might register a DBA or its equivalent with a city, county or state. If a person combines a tax identification number with a DBA, they are then in a position to open a business bank account that is separate from their personal account;
- Domain name: choosing a domain name, or web address or URL, protects a business’s website address. Once a domain name is registered, it cannot be used by any other person or entity. This is vital to protecting the brand presence of a business in the online environment. Registering a domain name is done through a registrar service. A directory of registrars who are accredited for this purpose can be found online. A business can choose the registrar that offers the exact services it wants at the price it wants to pay. A domain name needs to be renewed on a regular basis.
Most businesses try to use the same name for each kind of registration, but it is not a legal requirement. Failure to register names as required by law can lead to enforcement actions by the relevant government agency.
The United States Patent and Trademark Office maintains an official trademark database. A business should search the database for the names of the business, its products and services in order to make sure that they are not in use by another business in the same industry. Using the trademark-protected names of other businesses can lead to an expensive lawsuit for trademark infringement.
In addition to registering a name with the U.S. Patent and Trademark Office, a business may want to create and register a trademark for the business. A trademark is a logo or a special graphic symbol that gives a business a visual identity in the marketplace. Most states have provisions for the registration of a trademark. The U.S. Patent and Trademark Office also registers trademarks.
A business may have a company name that is different from its official company name. One main reason for this is that its company name may be easier to remember and more appealing to the average public consumer for marketing purposes. For example, a pharmaceutical company may be legally registered as “Douglas’s Chemical Productions, Inc.” However, they may use the company name “Douglas Potions and Pills,” or even simply “Douglas” since this is probably going to be more appealing to the public, as well as easier for the consumers to associate with the company’s products.
Thus, the use of company or trade names is a common practice that can help to better market a product or service, and can help deter negative publicity. On the other hand, the use of multiple names can sometimes lead to legal disputes for a company. Carefully checking databases of names for businesses, products and services is a necessary step when choosing names.
What If I Have a Company Name Dispute?
Disputes over company names can end up as legal conflicts for a business. One of the main disputes in this regard is confusion as to the actual, registered legal name of the company. The use of the wrong name in a document or contract can often render it void, thus undoing hours of negotiation because there is a technical error in the document.
Other company name disputes may involve:
- Copyright and Trademark infringement: Unauthorized use or reproduction of a company name or trademark can lead to legal penalties;
- False advertising: Advertising that causes confusion about a company’s name can cost a company loss of revenue. Intentionally trying to capitalize on another company’s name might lead to lawsuits that may result in an award of damages to the party that is harmed;
- Defamation: Purposefully displaying the name of another business in a manner that damages its good reputation or falsely alleges misdeeds on the part of the business can result in civil and sometimes criminal penalties.
- Transfers of ownership: Again, the use of the wrong name in an official document can lead to legal disputes and misunderstandings. For example, the wrong organization could even be referenced in the transfer or sale of a business, leading to predictable legal problems.
In order to prevent these types of disputes, a business should always delineate a clear difference between its legal name and its popular trade name. This is especially important during negotiations and when referring to the company in a contract or document.
Also, trademark and other infringement-related disputes can be avoided by choosing a company name that is not similar to another company’s name, whether it is their legal name or their company name. While this may make the selection of names more difficult, it will help to avoid expensive legal problems in the future.
Should I Contact a Lawyer If I Have Questions about a Company Name Dispute?
Company name disputes can be costly and may also have legal consequences. In order to avoid potential disputes, it is advisable to consult with an experienced corporate lawyer for advice on how to choose a proper business name. Your attorney can manage all of the different registration requirements for the locale in which your business operates. An experienced business lawyer can also research your naming options according to local, state and federal business laws.
Also, an experienced business lawyer can help represent you if you need to file a lawsuit due to a dispute regarding a company name or trademark.