Choosing a business name is one of the most important decisions a business owner will make. The name of your business is often the first impression a customer will form of your brand. It can also affect your sales, reputation, and even its chance for success.
When selecting a business name, it’s important to decide upon a name that’s easy to remember, descriptive of the business, and attention drawing.
But what if you find out that another business in a different state has the same or similar name? Should you restart the process of finding a name?
This article explores your options in this scenario.
Can I use a business name if it exists in another state?
All may not be lost. You can often use the same business name in your own state or another state, if it is not in the state where the business name is filed, and it doesn’t violate trademark rules. This is common practice for smaller local businesses.
However, this depends on what you mean by “business name”. Is it a legal name or a “doing business as” (DBA) name? Trademarks may also come into play.
If you plan to expand or operate your business outside your home state or nationwide, you will also need to be cognizant of any other business using the same or similar name.
Understand legal names vs. a DBA name
What is a business legal name and how does it differ to a DBA? A “legal name” is the official name used when you file with the state to form a legal business entity (such as an LLC or corporation). It appears on your formation document (e.g., Articles of Incorporation or Certificate of Organization). This name must meet the state’s business entity naming requirements for LLCs and corporations.
If you choose to operate your business under a name that is anything other than your given name (i.e., something fictitious), then that name is known as a DBA name. For example, if John Doe sets up a landscaping business and rather than operate under his own name, he chooses to call it “John’s Landscaping Solutions”, the name is considered a DBA name and may need to be registered with the appropriate local authorities. (More on this later.)
A DBA name is also called an assumed name, trade name or fictitious business name.
DBA names, unlike legal names, are often not exclusive in most states. If you incorporate as "Suzy’s Nail Bar, Inc.” (your business legal name), your competitors—or any other company—will be barred from incorporating or qualifying under that name. In some states, they would be barred from using a deceptively similar name.
In many states, no such protection exists for a DBA name. If you wish to protect a DBA name, you may be able to file for protection under the trademark and tradename laws.
Name availability for legal names
The availability of your chosen name may also be impacted by state legal requirements.
If you are forming your business as an LLC or corporation, for example, your business name must meet the state’s business entity naming requirements.
The name of a legal business entity must also be distinguishable on the record of the state government. That means that it must not be substantially similar to another name already in use by a business incorporated or registered to transact business in that state. If the name is not unique or if it is already in use, the state will reject the formation documents.
Additionally, your name must show your business type. Most states require that the company name be followed by a specific identifier, such as "Corporation", "Incorporated", or an abbreviation such as "Inc." or "Corp" for corporations, "Limited Liability Company" or the abbreviation of "LLC" for LLCs, "Limited Partnership" or the abbreviation "LP" for limited partnerships, or "Limited Liability Partnership" or the abbreviation of "LLP" for limited liability partnerships. These requirements vary by state.
Keep in mind, changing only your company’s identifier (such as from Corporation to Inc.) will not make your name distinguishable.
What is a trademark?
A trademark is a word, symbol, phrase, or design used to identify a manufacturer’s or seller’s products and to distinguish them from the products of others. A service mark is the same as a trademark except it identifies and distinguishes services. (The terms “trademark” and “mark” are frequently used to include trademarks and service marks.)
A business’ legal name (such as “Innovation Software LLC” or “Green Building, Inc.”) is not necessarily a trademark. A trademark identifies a business entity’s goods or services. A legal name identifies the business itself.
However, a legal name may be a trademark if it is used in commerce to identify the business’ products or services.
How trademarks may impact your use of a name
Trademarked names are registered with the U.S. Patent and Trademark Office (USPTO) and are protected nationally. If a business name is already trademarked, you are prohibited from using it even if the company operates in a different state to yours.
Trademark issues can be complex. In trademark infringement cases, courts look at whether consumers would be confused by two businesses that operate in the same industry. Essentially, if your name is likely to cause consumer confusion because it’s the same or like another business name, then you cannot use that name.
What if you want to trademark your name?
Trademark rights are acquired in two ways. One is by being the first to use the mark in commerce. The other is to apply for federal or state trademark registration.
Federal registration means that you file an application with the USPTO. A trademark provides certain benefits beyond those provided by common law, such as creating a nationwide presumption that the trademark is valid and giving you the right to use the trademark nationwide. It also enables you to bring a trademark infringement suit in federal court and allows the recovery of treble damages and costs under certain circumstances.
Once a trademark is granted, certain filings are required to maintain registration, including renewals and declarations that the mark is still being used. Trademark protection can also be lost if the mark is abandoned, improperly licensed, improperly assigned or becomes generic.
A trusted adviser familiar with trademark law can help you if you decide to take steps to protect your company’s trademark rights.
How can I see if a business name is taken?
There are several ways to research the availability of a business name.
The first is to conduct a trademark search. The USPTO website electronic search system is a quick and easy way to do this. Don’t overlook this step because a failure to check existing trademarks could result in an infringement lawsuit.
Next, conduct a legal entity name search via the Office of the Secretary of State or Corporations Division website in the state where you plan to form your business. You can also use State Name Check tools to see whether a name is available.
Keep in mind, a name check simply tells you that the name is available at the moment you perform the check. It does not “hold” the name for you or guarantee that you’ll have it. If there will be a period before you are ready to submit your incorporation or formation documents, consider taking advantage of a name reservation.
Don’t forget to check digital entities for use of your chosen name. Use lookup.icann.org to see whether a domain name is taken.
Registering your business name
Legal business names are registered upon a successful filing with your Secretary of State’s office. They will search their database to see if the legal name on your formation document is available. If not, the formation document will not be filed.
Note: If you are not yet ready to incorporate or form your legal business entity (such as an LLC or corporation), but would like to reserve your business name for future use, filing a name reservation will prevent another company from forming in that state with that name for a period of time.
To do business under a DBA name, you must complete and file the appropriate DBA forms and pay a filing fee. Depending on the state you may be able to file with a local or county clerk’s office, with a state agency, or both.
Learn more about reserving a business name: State Name Reservation.