When you’re starting a new corporation, one of the most important considerations is what to name your company. While this may seem like the easy part, there are legal and practical elements to take into account before settling on the perfect name for your corporation.
The Legal Basics of Naming a Corporation
The corporation is a highly formal business structure. As such, selecting a name for a corporation is a formal process. No matter which state you form your corporation in, you’ll need to register your company name with the Secretary of State.
The business name must be entirely unique — it cannot match the name of any other corporation or be reserved for another corporation. Most states have an online database where you can check the availability of your desired name.
You’ll also need to make sure the name you choose is not trademarked for another purpose, such as a product with a registered trademark. The US Patent and Trademark office offers a free electronic trademark search system that can help you determine if your desired name is available for use.
Another important aspect to keep in mind is that you cannot use any words that indicate a specialized business that you do not operate. For example, you can’t use the word “bank” if you’re not operating a bank, and you can’t use the word “attorneys” if you’re not staffed by lawyers. These words can vary a bit by state, so it’s important that you check with your state of formation for a complete list.
No matter what name you choose, one crucial detail is that every corporation must have at least one of the following words or abbreviations in its name:
Common Mistakes and Practical Concerns
Once you’ve gotten through the legal hurdles of name selection, you need to be sure the name is effective. It should make a good first impression and describe your business well. Most importantly, though, it should be a name you like. This is your company and the name should be something you can be proud of today and in the future.
With that in mind, here are some tips for choosing the perfect name for your corporation:
1 ) Choose a name that will work well online: These days, having a company name that translates to a catchy and memorable website URL is almost as critical as the name itself. You should always make sure a compatible domain name is available before making a concrete decision on your corporation’s name. Additionally, check to make sure you can obtain email addresses that fit both your company and domain names.
2) Consider several different options: One of the biggest mistakes business owners make is settling on a name before properly weighing all of their options. Whether you’re too attached to your first idea or willing to choose something simple and move on, if this first choice is unavailable, you’ll be back at square one.
To avoid a last minute scramble or having to settle for something that’s less than best, plan to create a list of at least two or three great options before making a final decision.
3) Find a name that sounds good out loud: Your name should roll off the tongue with ease, in a way that makes your company name sound natural. Too many business owners focus solely on choosing a name that looks good on paper, when it’s just as important that it sounds smooth out loud.
4) Reference the products or services your company sells: If your business operates in a specialized field, it may be useful to reference that specialty in the company name. For example, if you are starting an electrician business, having the word “electrician” or “electrical” in the name can be helpful for attracting customers.
This doesn’t mean your name should be boring. When referencing a common product or service, it’s even more important to find ways to make your business stand out.
5) Spread your values through your business name: If there’s a strongly held value that your business was formed upon, you might want to feature it in your corporation’s name. Of course, it’s best to steer away from potentially divisive values like politics or religion, unless your products and/or services are specifically targeted at those groups.
But if, for example, your business is heavily involved in your community or is environmentally friendly, those are great aspects to highlight in your company name.
6) Acquire alternate names with DBAs: If you have a variety of products and services and would like to offer some of them under a different name, your corporation can apply for one or more doing business as names (DBA).
While you can have only one legal name for your company, you can obtain as many DBAs as you like. For example, a large food service company may take our various DBAs for a catering service, a take-out restaurant, or a grocery store.
7) Reserve your desired name ahead of time: If you’ve settled on the perfect name for your company, but are not yet ready to form your corporation, you may be able to reserve your name.
Many states allow you to reserve a business name for a certain period of time, ensuring no one else claims the name before you’ve completed formation. Many states will also allow you to reserve a name in advance of expanding into that state.
There may be a bit more to naming a corporation than you originally thought, but it doesn’t need to be terribly complex process.
It is, however, a process that deserves a considerable amount of careful thought. Choosing your business name is one of the most important aspects of starting any corporation, as a great name can help you just as much as a bad one can hurt you.
Remember, this business will be a big part of your life for many years, so you should make sure you won’t tire of the name or wish you’d chosen a different one a few years down the line.