Business Name Law and Legal Definition
A business name is any name, other than that of the owner, under which a company conducts business. One of the first decisions entrepreneurs must make when starting a new business involves coming up with an appropriate and marketable business name. Although some entrepreneurs simply conduct business under their own names, most opt to create a distinctive business name that provides a good fit with the aims of their companies. The emergence of Internet commerce—with its attendant need for participating businesses to choose effective domain names—is another recent wrinkle in this realm. However, it is important for entrepreneurs to choose business and domain names that will not be confused with those of other businesses or infringe on their rights. The procedures that businesses use to register and protect their names depend to a large extent on the way that they are organized.
Entrepreneurs organizing as a corporation, limited liability company, or limited partnership are creating a distinct entity when they form their businesses. The entity comes into existence through filing a charter with the state in which the entity will operate. At this point, the state checks to see if the name chosen for the new business will be "confusingly similar" to that of an entity already registered in the state. Even if the state gives the business clearance to use the name, that does not necessarily mean that no other business is using or can use it. A similar business may be using the name in another state, for example. A sole proprietorship or partnership may be using the name in the home state; such entities need not register the name with the state. To avoid this situation, entrepreneurs can check a variety of databases that include the names used by a wide range of entities. These databases are accessible at many business libraries; most attorneys have access to them as well.
Although sole proprietorships and partnerships are not usually required to file charters with the state in which they operate, they are subject to certain rules if they plan to do business under any name other than the owner's own. The procedures for registering a "fictitious name" for a sole proprietorship or partnership vary by state. In some cases, the small business owner simply fills out a form—known as a "doing business as" form or DBA—available at its city or county offices, has the form notarized, and pays a registration fee ranging from $10 to $100. In other cases, the small business owner is required to print a legal notice announcing the fictitious name in a local newspaper. Perhaps the easiest way for the owner of a sole proprietorship or partnership to determine the appropriate procedure is to call his or her bank and inquire whether it requires registration of the business name to open a commercial account. It is important to note that corporations, as distinct entities, do not have to file a DBA unless they plan to do business under a name other than the corporate name for some reason. The documents of incorporation and the charter filed with the state serve the same purpose as a DBA.
Businesses can protect their names in a number of different ways. One option involves filing the name, along with any associated logo or slogan, with the trademark (or servicemark in the case of a service business) registry of any state in which it will do business. Although the protection is limited—because state registration can be preempted by federal registration—it does provide valuable evidence of prior use of the name in that state. Federal registration with the U.S. Patent Office is the strongest protection available for a business name. Federal registration prevents any person or business from using the name in the future within a relevant class of goods. However, people or businesses that have established rights through prior use of the name are usually allowed to continue to use it. Federal protection for a business name is generally difficult to obtain. It will ordinarily be denied if the name is already in use or if it is deemed too generic—applying to a class of goods rather than a specific product. In most cases, however, small businesses can obtain a comfortable level of protection by registering their names according to the procedures set forth by their home state.
Elias, Stephen, and Kate McGrath. Trademark: Legal Care for Your Business and Product Name. Nolo Press, 1999.
Lofton, Lynn. "What's in a (Business) Name? Plenty it Turns Out." Mississippi Business Journal. 11 July 2005.
Malandruccolo, Kris. "What's In a Name?" EventDV. November 2005.
"Q&A. What's In a Name?" Printing World. November 2005.
Williams, Phillip G. Naming Your Business and Its Products and Services. P. Gaines, 1991.
Hillstrom, Northern Lights
updated by Magee, ECDI