What To Name Your BusinessBy: Shaliz Sadig

If you’re starting a new business, there are many essential things to consider.  Once you have a unique idea, choosing a name is often the next logical and necessary step to take in distinguishing your business.  A name can say a lot and tends to set the tone for the entire brand.  Although choosing a name that is catchy and resonates well with potential clients is key, this is not all that matters.  When naming your business, it’s important to take a step back and view the situation from a legal perspective to minimize potential issues in the future. 

1.     Check out your competition.

First, determine whether there is another business with the same or a similar name.  Similarity is especially important in terms of geographic area.  In the beginning stages, another business with a comparable name could cause confusion among consumers and may hinder your success.  Simply performing a basic internet search to determine if there are any other businesses using a similar name may save you grief later on.  Search for variations of the business name with different spellings and in the singular, plural and possessive if applicable (for example: Actor, Aktor, Actors, Actor’s, etc).

2.       Make sure the potential name is available in your state for your limited liability entity.

It’s a good idea to check for availability of the preferred name in your state.  In New York, if you form a limited liability entity, all business must be transacted under the name of that corporation or LLC.  Typically, corporate names can be searched on each state’s online database such as New York State’s Corporation & Business Entity Database.  If a name is already taken, or yours is substantially similar to one currently registered, then it would be safer to choose something different.  If you are completely sold on conducting business under your chosen name, you can incorporate with an alternative name and register an assumed or fictitious name to Do Business As (DBA) your preferred name.  Obtaining a DBA allows you to operate under a name other than the one your company registered with the state. However, the costs, availability and geographic scope of DBAs vary from state to state and should be considered in advance.

3.       Consider long term goals for your business and whether the name is eligible for trademark registration.

Consider the kind of growth you envision for your company.  Is your business limited to a local area or will you be expanding across several states or the country?  Will you be providing services throughout the nation or globally, such as with web-based businesses?  It’s important to contemplate the territory of your business and what that could mean for competition.

A trademark is a brand name, logo, design or mark that helps identify particular goods/services. Registering the name of your business as a trademark can be a key tool in protecting your business from unfair competition.  As you build your brand and grow your business, a registered federal trademark can become a valuable asset, especially if you’re able to license it, create franchises or sell the business in the future.

For this reason, it’s essential to conduct a trademark search before finalizing your business name.  While that name might be available in your particular state, it may already be a federally registered trademark. You don’t want to invest substantial time and money into a business only to find out later on that you cannot trademark it.  Even worse, you don’t want to receive a cease and desist letter from the trademark owner demanding that you stop using the name all together and threatening litigation.

You can do a simple trademark search on the USPTO website to get a general idea of the availability of a certain name within different classes of goods and services.  If you’re serious about moving forward, you may want to engage an attorney to run a comprehensive trademark search and analysis.

Trademarking can be a tricky process.  Many applications are rejected by the USPTO.  When considering possible names for your business, it’s ideal to think of names or phrases that are not descriptive of the product or services.  The more unrelated (such as “Apple” for computer products but not for applesauce) or made up (such as “Xerox” or “Kodak”) the name, the better.  The strength of a mark is evaluated under a “spectrum of distinctiveness,” with some receiving less protection than others.  It’s advisable to stay away from using surnames for your business name.

Disputes over who owns the right to a name exist for businesses of all sizes.  Even established names such as Apple and popular musical act One Direction recently had to defend the right to use their monikers.  Although there may be more incentive for a suit against a large and profitable entity, small businesses with limited resources should remain especially wary because a legitimate infringement case can be debilitating.

Know where you want to go, check out your competition, and protect your brand.  Taking time to invest in the right name can go a long way for the growth and success of your business.

Contributing Author: Stephanie Westerman

Shaliz Sadig, Esq

Shaliz Sadig

Associate Attorney

(212) 865-9848

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