Key Takeaways

  • After reserving a business name, validate trademarks, secure a domain name, and prepare entity formation documents.
  • Name reservations are temporary; state rules vary on reservation lengths and renewals.
  • A reserved name still needs to meet specific state rules during formal registration.
  • Registering a business name can involve setting up trademarks, DBAs, domain names, and compliance documents.
  • Delaware is a popular but strategic choice due to its business-friendly environment.

When it comes to name reservation, you must first choose a name that’s not already taken by another company and reserve it with the Secretary of State’s office in your home state. After finding the right business name, you must take additional steps to ensure that you can use the name legally. In addition, you should check the available names in your state of residence.

Searching for Names

If another company has registered your intended name, or has a name that sounds like yours, state officials will not allow you to register it. This rule applies to the following entities:

  1. Corporations
  2. LLCs
  3. Any other entities that must be registered with the secretary of state

The procedures for searching for names vary by the state you live in, but you would generally search through an online database that your secretary of state provides. Certain states, such as California, compel you to send a name availability request via mail. In addition, the state mandates that you send a letter called a “Name Availability Inquiry Letter” to search for an available name.

Deciding to Register or Reserve a Company Name

After receiving confirmation from state authorities that the name is available, you may reserve it. Reserving company names creates your intention of using the name and prevents others from using it. With that, name reservations are limited in time in all cases.

  1. Example: In California, you have a 60-day timeframe when registering a name.

Check with your state to see how long you may reserve a legal entity name. If you do not need to reserve a company name, you may go straight to the registration process. To create an LLC, for instance, you need articles of organization to successfully create your business, and articles of incorporation for a corporate entity.

What to Do After Reserving a Business Name

After successfully reserving a business name, you should move quickly to complete other foundational steps:

  • Confirm entity type: Decide whether your business will operate as an LLC, corporation, partnership, or sole proprietorship, as this affects registration requirements.
  • Draft formation documents: Depending on your structure, prepare articles of organization (LLC) or articles of incorporation (corporation).
  • Apply for an Employer Identification Number (EIN): You’ll need an EIN from the IRS if you plan to hire employees or open a business bank account.
  • Prepare an operating agreement or corporate bylaws: While not always required, these documents formalize how your business will run internally.
  • Open a business bank account: Once your business is registered, opening a separate bank account is critical for liability protection and financial management​​.

Registering or Reserving Your Company Name

To register or reserve a name, you may go to the secretary of state website to find out more information about the registration process in your state and the fee structure. The registration fee itself depends on the state you live in, but the fee is usually around $100 in many cases. If you don’t intend to register your company name immediately, or if you are unsure when you can successfully file the documentation, you should reserve your company name first.

It should also be noted that name reservation does not always guarantee that your name qualifies for registration. For instance, corporate names must include such designators as “Corporation,” “Incorporated,” or any other abbreviated form. The name could still face rejection during the registration process because it does not meet state requirements.

  1. Note: Company name registration is permanent and cannot be reversed when you submit the paperwork.

If you intend to create a sole proprietorship instead, you do not have to register the business with the state. However, business name registration safeguards your brand and company from other entities that may use the name.

When it comes to name research, don’t stop at the state level. Your intended name could also be registered in the form of a trademark. First, search through a list of various places to research company names to ensure the name is not being used elsewhere. If you no longer desire the reserved name, you must take procedures to dissolve the name. Regardless of the name you decide, it may also be a good idea to reserve the name first. For instance, you may love your name at first, but later decide on a better one. If you registered first, you have no way of reversing the name if you want to change it.

Understand Name Reservation Limitations

While a reservation gives you temporary rights to a name, it doesn’t guarantee permanent rights. Consider these points:

  • Reservation expiration: Each state limits the length of a name reservation—often between 60 and 120 days. You must either renew or move to register your business before it expires.
  • Name standards for registration: Even with a reservation, your name must meet your state’s business naming guidelines during formal filing, such as including required words like "LLC," "Inc.," or similar.
  • Fictitious business name (DBA) considerations: If you plan to operate under a different name than your legal entity name, you’ll need to file a DBA separately​​.

Delaware Registration

When it comes to Delaware registration, many small business owners ask themselves if they should register in Delaware. Many business owners choose Delaware because it is an easier process when registering a business entity, and its usually less expensive. With that, this is not always the ideal solution, and you should conduct more research to find out if registering in Delaware is the right choice for your business aspirations.

You should know that Delaware has some of the most business-friendly laws in the nation, which is another reason why many LLCs and corporations choose the state. In fact, Delaware has its own court called the Court of Chancery, where the court system is centered around business law, and the judges decide cases, instead of a jury.

Is Reserving a Name in Delaware Right for You?

Reserving and registering a name in Delaware can be advantageous, but it may not suit every business:

  • Out-of-state registration: If you form your business in Delaware but operate primarily in another state, you must also register as a “foreign entity” in your home state. This can add complexity and cost.
  • Annual franchise taxes and reporting: Delaware businesses must pay annual franchise taxes and file reports, regardless of actual business activity.
  • Privacy protections: Delaware does not require the listing of member or shareholder names in public records, offering greater privacy.
  • Investor appeal: If you plan to seek venture capital funding, investors often prefer Delaware corporations because of favorable case law and the Court of Chancery​.

Frequently Asked Questions

  1. What should I do immediately after reserving a business name?
    You should check trademark databases, secure your domain name, draft your entity formation documents, and prepare for registration.
  2. Can I operate my business using only a reserved name?
    No, name reservation only holds the name temporarily; you must register your entity to legally operate.
  3. How long does a name reservation last?
    It varies by state but typically lasts between 60 and 120 days. Some states allow renewals with an additional fee.
  4. Do I need to trademark my business name after reserving it?
    It’s not required, but federally trademarking your name can provide nationwide protection beyond your state registration.
  5. Is Delaware the best state to reserve a business name?
    Delaware is favorable for many businesses due to its laws, but registering there may not be ideal if you primarily operate in another state.

To learn more about name reservation, you can post your job on UpCounsel’s website. UpCounsel’s attorneys will provide additional information on reserving company names and what you need to do throughout the registration process. Moreover, they will give you more information on the necessary maintenance procedures for your business.