When opening a business, building a distinct legal entity is often the first step. In California, there are four main types of entities: corporations, sole proprietorships, partnerships, and limited liability companies. Because of their limit on liability, many new business owners choose limited liability companies, and the first step to creating one is filing with the California Secretary of State and creating a name.
Unfortunately, many filings are rejected by the state due to errors, omissions, naming issues, or misstatements in the filings submitted to the Secretary of State. One of the most common issues is entity names.
If a new business accidentally or purposefully tries to use the name of another business, the Secretary of State will likely reject that business’s filing documents. This is why it is so important to ensure that one’s business name is unique.
Specifically, for limited liability companies in California, the entity name must be distinguishable in the Secretary of State records, and it cannot mislead the public. Check the name against the entities registered with the Secretary of State. This can be done through a Business Search on the Secretary of State’s website.
However, as proposed names can be reserved for 60 days, this search may not be 100% accurate. And, this search is only for California. Even if the Secretary of State approves the name, they do not check any other state’s registry or national trademarks. This will require searching each state’s Secretary of State website and the U.S. Patient and Trademark Office, or simply contacting an attorney. Accordingly, signs, stationary, and other business items should not be ordered until the Secretary of State approves the submitted name.
While a rose by any other name may smell as sweet, a business name already in use will cause litigation issues. As readers can see, even the simple act of naming a new business can be a laborious and complicated process. This is why many often opt to hire an attorney to streamline it and ensure that their new business is created efficiently and legally.
