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What should I know about choosing a business name?

by | Jun 12, 2022 | Business Law

Selecting the right name for your new business is important and not just because it identifies your enterprise to the public. A business name must meet certain requirements in California to be valid. To choose a legally permissible name, you should consider how to avoid picking a name that can land your business in court.

Choosing the right name is often a matter of not selecting a name another business is using. Additionally, there are some other requirements by law you should be aware of.

Requirements for business names

The California Secretary of State website explains that if you want to set up a corporation, a limited liability company or a limited partnership, you must create a name that people can distinguish from other businesses of the same structure. If you come up with a name for an LLC, your name must be different from the name of another LLC. This includes a name distinguishable from a current active name or a name reserved for future use.

In addition, whatever name you pick should not be likely to mislead the public. If your company does not provide insurance, you should not add words that denote that your company will insure a customer. You also should not use words that suggest your company is a government authority or that you are a public corporation if your business is not a corporation.

Check fictitious names and marks

The California SOS site allows people to conduct name searches against other business names registered with the state’s SOS office, but there are other legally recognized names that you should check if you want to keep your business out of legal trouble. The SOS site cautions that it does not check the availability of fictitious business names, so you will have to look up those names separately.

In addition, the state SOS does not provide the availability of trademarks and service marks. You may want to trademark your business name. However, if someone else has trademarked the name you want and you try using the name anyway, the other party may bring suit against you for damages. A thorough search of other business names and trademarks may save you a lot of trouble.