LLC Naming: Everything You Need to Know
LLC naming is an important step in starting a business. The name will define the company's identity and distinguish it from competitors.3 min read
2. Changing LLC Names
3. Advantages of Forming an LLC
LLC naming is an important step in starting a business. The name will define the company's identity and distinguish it from competitors. Choosing a name isn't just about what is catchy and clever; it also requires you to meet the state LLC regulations and federal trademark regulations. The name should also present the company in an appropriate and professional manner that future business clientele will appreciate. An LLC, or limited liability company, is one of the most popular ways to structure a new business.
LLC Name Requirements and Restrictions
State laws will vary on some name requirements for an LLC. However, some commonalities that appear in all states include:
- The name must indicate it is an LLC. This can be the full name of a limited liability company or a form of the abbreviation.
- Abbreviations that are allowed include "LLC," "L.L.C.," "L.C.," "LC," "Ltd," and "Co." for company. Check with your state to confirm the version you choose is allowed.
- The name cannot be confused with another company and must be easily distinguishable.
- The name must not be intentionally close to another company name.
- The name must be unique.
It is important to note that certain types of businesses cannot form as an LLC, including insurance companies and banks. LLC names cannot include the word "bank" or "insurance" because of this restriction. Some states do not allow the name to include words that are:
- Seen as obscene.
- Present an untruthful association with any government entity.
- Encourage illegal activity.
- Blocked by state law to be used with a business.
Once a name is chosen, the first step is to check that another business is not using it. To check if the business name is already in use, most states offer a free search option through their state website. A search should also be completed online through the U.S. Patent and Trademark Office to confirm the name does not violate any existing registered business trademarks. Unregistered trademarks of company and product names, which can be searched for through The Thomas Register, are also protected.
Changing LLC Names
If the company is operating under a name other than the LLC name, a DBA, or Doing Business As, is needed in some situations. If you are operating as a sole proprietorship or a partnership, this is required. A DBA is not necessary for an LLC or a corporation unless the LLC or the corporate name is being replaced with another name while performing business.
Each state has its own regulations in place in regards to the specific filing requirements on DBA filing. A fee may also be required, and the amount will vary by state. If the intention is to change the name of the LLC entirely, an LLC amendment form must be filed with the state. As with the DBA, the LLC amendment form also has a fee. Each state determines the fee amount.
For the most current information on rules and fees on the state where you are choosing or changing an LLC name, you can visit the secretary of state's website.
Advantages of Forming an LLC
Many companies choose the LLC structure because it creates a protection of the member's personal assets from any liabilities that come from creditors or legal action the business must pay. A limited liability company is also the most flexible and simplest of ways to form a business. You will find the focus can be on the business, not on paperwork.
Additional advantages include:
- Ownership and formation requirements are less demanding than an S-Corp or a C-Corp.
- LLCs have no restrictions on ownership.
- Business and personal finances must be separate.
- LLCs are allowed in all U.S. states.
- Management structure is flexible.
- Options for tax reporting are flexible.
When the formation of an LLC takes place, the Articles of Organization must be filed with the state. The articles are typically quite lengthy and should meet all state requirements. The time it takes to form an LLC officially will vary by state. This can be a few days to 12 weeks. Some states do offer an expedited filing option. Refer to the secretary of state's website for information related to filing fees and expedited filing options.
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