Naming your Business - Legal Issues to Consider

Good post by Small Business 2.0 on the creative side of choosing a business name: 18 Pithy Insights into Naming your small Business.

Here are a few points on the legal aspects of choosing a name for your New York business.

First it is helpful to understand that "business name" can mean different things in the legal context.  It could mean the legal name of a business, the fictitious (aka assumed name) of a business, or the trademark of a business.  Examples:

Legal Name: Joe formed a corporation with the name Kazooka, Inc. by filing a certificate of incorporation, which states that the corporation's name is Kazooka, Inc., with New York's Department of State.  Kazooka, Inc. is the legal name of the corporation.

Assumed Name:  Kazooka, Inc. operates a dry cleaning service under the name of "Squeaky".  This is an assumed name, because Kazooka, Inc. is doing business under a name different from its legal name. 

Trademark:  Kazooka, Inc. uses "Squeaky" to promote its service by displaying it on store signs, laundry bags, even t-shirts it hands out to its loyal customers.  By doing so, Kazooka, Inc. uses the business name "Squeaky" as a trademark and qualifies for state and federal trademark protection.  Actually, since they are selling a service, it would be called a service mark, but let's not split hairs here. 

1. Legal Name Issues

You need to make sure that the legal name you choose for your business is available in New York and permissible under New York's naming rules.

Availability

In the case of an LLC, a name would be available, if the name is distinguishable from other New York business entities, foreign business entities authorized to do business in New York, business entity names reserved with the Secretary of State, and assumed names registered with the Secretary of State. See Section 204(b) of the New York Limited Liability Company Law.

To find out whether your name is available, you can search New York's business entity database.  However, that database won't show you reserved names or assumed names.

Naming Rules

These rules tell you what the name of your entity must contain and which words or abbreviations are prohibited.

For corporate naming rules, check Section 301 New York Business Corporation Law.
For limited liability companies, check Section 204 New York Limited Liability Company Law.

2.  Assumed Name Issues

If you adopt an assumed name for your business, you have to know your DBA ("doing business as") responsibilities.  You have to register the assumed business name, either with your local county or with the Secretary of State.  See this earlier post on the topic of assumed business names.

Sidenote: If Kazooka, Inc. would have used "Kazooka" instead of "Kazooka, Inc." in its business dealings, the name would not be considered an assumed name.

3. Trademark Issues

You want to make sure that your name is capable of obtaining trademark protection and does not violate somebody else's trademark. 

Names that are descriptive of what your business does, for example, "Dry Cleaning Shop", won't get trademark protection.  But there are many more issues to consider.  If you are dreaming of developing a major brand, consult an attorney.  

Finding out whether your chosen business name would violate somebody else's trademark is similarly tricky.  If "Squeaky" had already been in use by a dry cleaning establishment, Kazooka, Inc. may be in trouble.  Again, consult an attorney.

Comments

[Nicole]

Hello!
I am concerned. I want to start an apparel/art distribution business and the name that I want is taken by a band. Are there legal issues concerning bands? If they give me permission, is it ok? If they don't, can I get in trouble?
Thanks for your time!
Nicole

[Melinda Klubek]

I started an electrical contracting company within rochester new york, monroe county. One of the nieboring counties (livingston county) has a business rgistered in that county with the same name. I wanted to advertise in the phone book, but the phone book reaches livingston county where the other business name like mine is registered. I guess my question is can you do business and advertise in other counties other than the county your registered in?

[DGY]

I heard that it is not wise to use the word "Institute" in a business name. What are the legal implications?

[Electrical contractor New York]

Thanks for this informative post