5 Things to Know When Choosing a Name for your Limited Liability Company
- Overlap may be present when trying to file an LLC. Check multiple avenues to prevent infringement on existing LLCs and other types of entities. Do a search for the name you desire using telephone listings in the areas you want to grow in, county clerks, business city directories, internet, and review trademarks and service marks on file with the US Patent and Trademarks Office. Check as many places as you can think of to minimize overlap and the threat of future prosecution.
- The best company names are fresh and original. However, rarely do new ideas occur when creating a distinguishable name in today’s advanced society. In order to acquire an LLC, the creators must make sure the name is in compliance with all laws and regulations…and there are quite a few.
- If the name you chose for your LLC is unacceptable, the state agency for entity formation (in many states it is called the DOS–the Department of State) will suspend your authority to conduct business. But be mindful that the method the DOS uses to determine whether a proposed name is acceptable does not ensure that no one else is using it. So do your research! For example, the DOS might approve a name for New York, and then as you take the next step to obtain an EIN, the IRS may reject the name. Your research must be thorough.
- Your chosen name must contain certain terms. The DOS requires the name of your company to include a designation indicating the type of company it is. In essence, people should be able to look at the name and know immediately what type it is. For instance, when you see the name “ABC Corp” or “ABC, Inc.” you will immediately know that the company is a corporation, a company that has been incorporated. Likewise, for an LLC, the terms “Limited Liability Company”, “LLC”, or “L.L.C.” must be included so that the public will know it is a company with limited liability.
- Your chosen name must contain certain terms. The DOS requires the name of your company to include a designation indicating the type of company it is. In essence, people should be able to look at the name and know immediately what type it is. For instance, when you see the name “ABC Corp” or “ABC, Inc.” you will immediately know that the company is a corporation, a company that has been incorporated. Likewise, for an LLC, the terms “Limited Liability Company”, “LLC”, or “L.L.C.” must be included so that the public will know it is a company with limited liability.
- What if you create a fresh new name, but you’re not ready to launch? Reserve it!!! Names can be reserved for use at a later date by filing an application for Reservation of Name. If your application is approved, the DOS will issue a Certificate of Reservation to you. In New York, like many states, this will make your name unavailable for the next 60 days. If you see that you need more than 60 days to launch, you are allowed two extensions of 60 days each. Please be advised that these guidelines fall within the New York State Limited Liability Company laws. These guidelines may not be relied on but can be helpful in understanding this concept regardless of the state you are filing in.
While it is important to be aware of the complexities that are associated with choosing an LLC, don’t get discouraged! There are long term benefits and profits that can be achieved by understanding basic regulatory compliance. Either way, companies frequently have to go through this and other tedious processes in order to succeed.
