After brainstorming for hours and asking all of your friends and colleagues for feedback, you’ve finally come up with the perfect name. Miraculously, the URL was available, at least in the .us top-level domain. However, you are not yet in the clear.
When selecting a corporate name, you need to keep these questions in mind:
- Is the name available for registration and use as a trademark; and
- Is the name available as a registered business name with your state of incorporation’s Secretary of State’s office?
Is the name available for registration and use as a trademark?
Determining whether a name is available for registration with the US Patent and Trademark Office (USPTO) and is available for use in commerce without infringing on another party’s trademark rights requires consideration of third party company names and trademarks that are not only similar to your name but also used on products or used in connection with services that overlap with, or are related to, your commercial products and services.
Identical trademarks are permitted to coexist on the USPTO Trademark Register if the use of the respective marks are not likely to create consumer confusion as to the source of the respective goods and services offered under those marks. For example, United Van Lines, United Health Care, and United Airlines each claim UNITED as its core brand and each are permitted to own exclusive trademark rights in the UNITED mark within its particular areas of business (home and office relocation services, health care services, and airline transportation services).
Ask your attorney about running a trademark availability search for the US as well as other key country markets for your brand to better assess the likelihood of national registration of your mark before filing the application.
Is the name available in your state of incorporation?
In contrast, determining whether a name is registerable as a business name is simply based on availability (similar to trying to register a personalized vehicle license plate with the DMV) – although there are specific restrictions regarding the use of particular “industry reserved” terms, such as “bank,” the Secretary of State’s office will not permit registration of your proposed company name if the identical or nearly identical name of an active company already exists on its business name registry. The Secretary of State’s office doesn’t care whether the conflicting name belongs to a company you’re competing directly with or if it’s in a totally unrelated industry.
For example, an attempt to register the company name Gene Machines for a genetic laboratory equipment business with the CA Secretary of State’s office will be unsuccessful if another business had previously registered for the use of Gene’s Machines as a motorcycle repair shop company name.
Is Your Name a Viable Trademark?
Prior to registering your company name with the Office for the Secretary of State, you should consider that company name as a trademark – specifically, is that mark available for registration with the USPTO and is it likely that a third party who is already using that mark (or a confusingly similar mark) on or in connection with products and services related to those you intend to sell and/or perform will challenge your name as an infringement to his/her prior trademark rights.
Company name availability determined through the name check process with the various Secretary of State offices (see below) does not guarantee that the name is available for use as a trademark in connection with the sale of particular goods or services, and securing a name through filing of incorporation documents, qualifying to do business, or even registering a related domain name, does not confer trademark rights. Therefore, if you intend to use some variation of the corporate name as a trademark or service mark in your business, we strongly recommend conducting trademark searches to determine if there are conflicting or similar trademarks or names in use.
A preliminary search of the U.S. Patent and Trademark Office and the records maintained by the various state trademark registries is done online and is reasonably inexpensive. Full trademark searches are more comprehensive since they look not just at registered marks and applications, but also at business directories and other sources that will help you understand if another business may have a legitimate basis to object to your trademark application. This kind of search is more expensive, but is generally cost effective if you consider the high cost of name changes after a corporation has begun significant operations. Giving careful consideration to these issues during the planning and organizational phase can save you considerable frustration, time and money in the future. Contact your attorney for further information on these matters and the advisability of doing a comprehensive trademark search.
To learn more about trademarks, see our article on Neglecting Trademark Protection Could Be a Costly Mistake.
What’s in a Name: State Requirements
It is necessary to check the corporate statutes of the proposed state of incorporation for any special provisions relating to corporate names when considering a new company name. Corporate law requirements will vary from state to state.
In Delaware, for instance, the corporate name must contain one of the words “association,” “company,” “corporation,” “club,” “foundation,” “fund,” “incorporated,” “institute,” “society,” “union,” “syndicate,” or “limited,” (or abbreviations with or without punctuation). The Division of Corporations in the Department of State may waive this requirement (unless it believes the name is, or might otherwise appear to be, that of a natural person) if you execute, acknowledge and file with the Secretary of State a certificate stating that your total assets are not less than $10,000,000. In addition, your company name must not contain the word “bank” or any variation thereof, with some exceptions.
In California, the name of a person may not be used as a corporate name without the addition of a corporate ending or some other word or words, which show that the name is not that of the individual alone. Also, the words “bank,” “trust,” “trustee,” or similar, may not be a part of your corporate name unless approved by the Superintendent of Banks. The word “co-operative,” or any abbreviation or derivation of that may not be part of a corporate name unless the corporation is incorporated pursuant specified sections of the California Business and Professions Code.
The Secretary of State or similar officer for virtually all states maintains a consolidated list of the following
- names of all corporations, limited partnerships and limited liability companies and (in some jurisdictions) partnerships (“Covered Entities”) in good standing,
- names of all Covered Entities qualified to transact intrastate business and in good standing in the state,
- corporate names already reserved,
- sometimes names of nonqualified Covered Entities registered under a state trademark registry, and
- names that will become record names of domestic or qualified foreign corporations at some delayed effective date of a filed corporate or partnership or limited liability company instrument, such as a merger agreement.
The Secretary of State will not accept a certificate of incorporation for filing if the stated corporate name resembles closely, is confusingly similar to, or is the same as any name on the consolidated list. Note that the Secretary of State frequently considers the words “corporation”, “incorporated” and “inc.” to be equivalents for purposes of availability.
A further consideration in selecting a corporate name is whether that name is broadly available for use in other states where the corporation will be conducting business. A corporation must qualify to do business in any state in which it does business. In each of those states, it is necessary to check name availability. If a name is not available, state laws generally provide for the use of an “assumed” name (sometimes referred to as a “dba” [“doing business as”] in a foreign state.
Reserve and Get Advanced Approval for Your Corporate Name
Proposed corporate names for new corporations, as well as newly qualifying foreign (out-of-state) corporations may be precleared through the name availability section of the Secretary of State’s office of the appropriate state prior to the submittal of documents for filing. The preclearance and/or reservation of a corporate name will help you avoid the rejection of documents submitted to the Secretary of State for filing because of a name conflict.
If you are incorporating in Delaware, a preliminary check of the name availability may be obtained online at https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx or by calling the Secretary of State’s office (302-739-3133). You may then proceed in reserving the name through the filing service as noted above. In Delaware names are reserved for a period of 30 days.
The availability of a name may be determined on a preliminary basis by calling the Secretary of State’s Office (916-322-2387 for corporations or 916-324-6769 for limited partnerships), or see http://www.sos.ca.gov/business/be/name-avaitability.htm. Two names will be checked per each telephone call. (A name may not be reserved by a telephone call to the Secretary of State’s office.) A telephone check is subject to later verification, and the articles may be rejected if the telephone check was inaccurate. It is strongly recommended not to rely on verbal information obtained by telephone in proceeding to file articles.
We recommend that the desired name immediately be reserved to ensure its availability, either through your attorney’s prepaid account with the California Secretary of State, or through a filing service. We also recommend starting with a minimum of three proposed names, ranked in order of preference, to facilitate reservation of a name in the event that the name of first choice is not available.
If your desired company name is not available because that name or a similar one is in use, it is possible to obtain the consent of the entity using the name and file the consent with the Articles of Incorporation or Certificate of Limited Partnership or Articles of Organization. You may obtain the address of the entity already in existence, and the name of its officers, from the Secretary of State’s office (916-445-2020).
In states other than Delaware and California, the time period for which names will be reserved varies greatly. When a corporate name has been reserved in one or more states, it is advisable to calendar the expiration date.