You spend time coming up with the perfect name for your business then you spend lots of money creating business cards, signs, and other marketing collateral. But what happens if someone else is already using that name or the name is soon adopted by another company?
When multiple businesses have the same or similar names, potential customers are confused and this leads to lost sales. It happens to many entrepreneurs, and it’s completely preventable.
There are two strategies you can use to protect your business name. One is to register a business name and the other is to trademark a business name. We’ll look at both so you know which is the best fit for your company.
Registering a Business Name Will Protect You at the State Level
One of the reasons I’m such an advocate for forming an LLC or incorporating is that you automatically get your business name registered with the state where you file your business structure paperwork.
When you apply to be a corporation or an LLC, the Secretary of State will first check to make sure that your proposed business name isn’t already in use by another company in the state. If it is in use, you are unable to register this same name. If it is not in use, your business registration can proceed and your business name is now protected in the state of registration. This means no other business will be able to form an LLC or corporation with the same name in that state.
Some things to keep in mind about registering your business name:
- The laws about just how different a name must be from other business names vary from state to state. For example, some states may allow the name “Kelli’s Kookies” when there’s already a “Kelly’s Cookies” registered. Other states may reject it and consider “Kelli’s Kookies” too similar to the original.
- Registering your business name won’t protect you from Sole Proprietorships or Partnerships from using your name. It only keeps another LLC or corporation from using that name.
- Registering your name with your state won’t help you in the other 49 states. If you incorporated your business in New York, no one can use the name there, but another business can still use your same name in Tennessee or Oklahoma. They can even incorporate or form an LLC in these states with the same name you worked so hard to come up with.
If the focus of your business is local only, registering your business name should be sufficient. If you’re not competing with other businesses in other states, you probably don’t need more protection beyond registering the name in your state.
On the other hand, if you want to sell your products across the country or don’t want anyone else in the nation with the same name, you should consider trademarking your business name.
Trademarking a Business Name Will Protect You at the National Level
A trademark is a word, phrase, symbol, design, or a combination of any of these that identifies the source of a product or service and distinguishes it from competitors. You can trademark your business name, logo, or slogan.
If you decide to trademark your business name with the U.S. Patent and Trademark Office (USPTO), you will have exclusive rights to the trademark and no one else can use it in any state in the US.
Some things to keep in mind about trademarking your business name:
- A trademark will cost you hundreds of dollars per class and this will cost even more than that if you hire an expert to prepare the paperwork for you.
- It can take on average 6-12 months to get your trademarking application processed and approved.
- While the process is more expensive and time-consuming than registering a business name, it does provide you with the protection of your business name in all 50 states.
- Trademarks have an unlimited lifespan, so long as you comply with the renewal requirements, your business name is protected.
If completely owning your business name in all states is important to you, it’s worth the pain to apply for a trademark for the name. Keep in mind that others may try to use your name, but you’re protected, so you can take legal action to stop them from continuing to use the name.
As you start your business, consider what level of protection your business name needs, and take appropriate measures to ensure your name remains unique.