Unlike celebrities, who seem to use fewer names the bigger they get (looking at you, Cher), companies often collect more names as they grow - there may be a parent company, multiple subsidiary companies, joint ventures, etc. - each with its own legal name and one or more trade names.
But since you’re the owner of a new small business - not a pop diva or Wal-mart - here’s what you need to know about company names:
What is a legal name?
Every company has a legal name. The legal name is the name that is listed on the document (usually a Certificate of Incorporation or Articles of Organization) that is filed with the Secretary of State to legally form your company.
The business’s legal name is the official name of your company - the IRS will use it when taxing you, it’ll go on your lease if you rent space, and any equipment or vehicles your business owns will be titled in the legal name.
What is a trade name?
Some companies choose to use a “trade name” for their public-facing activities, such as on the sign at a retail location, at the top of a website, or stamped into the bottom of a product.
Trade names may also be known as “assumed names”, “fictitious names”, “doing business as” (DBAs), or “trading as” (T/A).
Depending on the state in which you’re operating, you may be required or allowed to register a trade name. In some states, this registration is done on a county-by-county basis. Registration usually prevents someone else from registering and using that name in the same state or county. Of course, there is a registration fee for each name and each county or state in which you choose to register a trade name.
Should your business have a trade name that is different from its legal name?
Not if you can help it.
Our company - Startomatic
- was founded by people with a lot of experience starting companies. One lesson we’ve learned though that experience is “KISS” - Keep It Simple, Starters
The simplest way to name your new company is to use a legal name that is also your public-facing name. That way, there’s only one name to keep track of, and no extra d/b/a filing fees or forms.
That said, there may be some situations where you would want your legal name and trade name to be different - and that’s ok, it just has the potential to create a little more confusion, and there may be some additional filing fees and paperwork.
Here’s an example: You want to call your new publishing company “Flourish & Blotts”, but there is a “Flourish & Blotts, Inc.” already registered with the Secretary of State in your state, and that Flourish & Blotts operates an exotic pet store.
Since the companies are in different industries, you could still use “Flourish & Blotts” on your signs and letterhead without violating a trademark
of the pet store. However, you would not
be allowed to register “Flourish & Blotts LLC”, “Flourish & Blotts Incorporated”, or any other legal name that is very similar to the other company’s already-registered name. So you could register “F&B Publishing, LLC” (or similar), and then file for the trade name “Flourish & Blotts”.
How can you find a conflict-free name for your business?
To help you choose a legal name which can also be used as the public-facing name of your company, Startomatic runs your name through several checks, from automatically searching the USPTO’s nine-million-plus registered trademarks, to searching the Secretary of State registries, to targeted Google searches.
Once you’ve chosen the name, Startomatic even automates the filing process for corporations and LLCs in all 50 states.
What are you waiting for? Get to it!