What to Consider When Naming a Business
UPDATED: June 19, 2018
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Business owners should research and carefully select the name for their new business to ensure that their desired name is not already in use by another business or too similar to the name of another business. Selecting a name that is already in use, even if it was not intentional, may result in a trademark infringement lawsuit or business owners may be forced to change the name of their fully operational business. For some business owners, selecting a business name can be as simple as adding “Inc.” to the end of the business name, but for others additional research is necessary to avoid conflict with another business.
Research Your Business Name
Prior to finalizing the name of your business, consider several variations of your chosen name so that you are not disappointed if your desired name is already in use by another business. Most states will not allow the articles of incorporation to be filed if another corporation of the same name is already in the corporate database. A name that is too similar to a pre-existing business may also be rejected by the state so it is crucial that you research your desired business name thoroughly before filing the articles of incorporation.
Most states do not recognize a difference in the name if it starts with “the.” This means that if you want to name your corporation “The Orange Box, Inc.” and there is already a corporation named “Orange Box, Inc.,” you will be prevented from using your name. Also, most states do not recognize a difference in the identifier you use. This means that you may not name your company “Orange Box, Co.” or “Orange Box, Ltd.” when an “Orange Box Inc.” already exists.
The first place to begin researching your desired business name is the internet, especially if you want the web domain name to be the same as the business. A general search on widely used search engines will help you determine if your desired name is already in use by another business. In addition to searching on the internet, also search on state websites that maintain a list of active corporations operating in the state in which you wish to incorporate.
Avoiding Trademark Infringement
The most important reason to research and carefully select your business name is to avoid trademark infringement. Trademark infringement lawsuits can happen when you choose either an identical or similar name as another corporation, especially when you sell the same or similar product as that corporation. When choosing a name for your business, avoid causing customer confusion by selecting a name that is too similar to the name of a competitor.
For example, a business that sells freezer units to restaurants is named “Freeze-away, Ltd.,” after the business owner researched the name using search engines and consulting with the Secretary of State. Two months after being in business, a cease-and-desist letter is issued from another company named “Freeze-my-way, Ltd.” that also sells freezer units to restaurants and has been in business for several years prior to the formation of Freeze-away Ltd. Although both businesses technically have different names, “Freeze-my-way, Ltd.” may still have a viable legal claim because there could be customer confusion between the two companies. Courts may order fully operational businesses to rename the business, which can be a complicated process that is disruptive to the daily operations of the business.
Consulting an Attorney
Consulting a trademark attorney at the planning stage of your new businesses would avoid the later risk of a costly trademark infringement lawsuit.