What to Consider When Naming a Company
There are many things to consider when incorporating a company. You will need to make many important decisions from the early days of your startup and then throughout the life of your company. One of the most important, in addition to choosing which entity type to form is determining your company name.
Naming an LLC or Corporation is often a difficult decision since choosing the name of your company determines so many other aspects of your business, such as the website domain, the logo, the overall branding and potential copyrights and trademarks.
Take your time with this step, as your company name can have a significant impact on the success of your business. Google certainly has a much better ring to it than the original name, BackRub. Sony definitely rolls off the tongue more smoothly than Tokyo Tsushin Kogyo. I think we can all agree that The Hertz Corporation sounds way better than Drive-Ur-Self.
You also need to ensure the company name you choose does not infringe upon another company’s existing copyright or trademark. And you'll want to consider additional factors such as how your company name will appear on documents, on a logo and on other business materials.
Naming a Delaware LLC or Corporation
If you’ve decided to incorporate in the state of Delaware, you may be wondering if you have to check the name in order to make sure it’s available. As far as Delaware is concerned, if the name is available and does not contain any restricted words, you’re good to go. A few examples of words you cannot use in names for a corporation in Delaware are:
- university
- college
- bank
- trust
Something to consider when naming a company is whether or not your name idea is unique. Our team can do a company name check. and typically receive a definitive answer on whether or not it contains any restricted words and if the proposed company name will get approved by the Delaware Division of Corporations.
Delaware Corporate Endings
One thing you may not know is that in Delaware, the "corporate ending" does not have to appear at the actual end of the name. If you’d like to form a company that will sell products on Amazon or Etsy, you can form with the company name, John’s LLC for Sporting Equipment. If you form a Corporation, you can register your company as Nicole’s Corporation for Office Supplies. The corporate ending simply has to appear somewhere within your company name.
If your company name is deemed too similar to another that’s already registered in Delaware, there are several options. You can’t just change the company’s corporate ending, and get it approved by the Delaware Secretary of State. The company name must be different from all others, and the Division of Corporations does not consider the corporate ending when determining if a name is available. What you can do is add another word to the name that will make it unique or, alternatively, come up with an entirely new name.
Naming an LLC or Corporation While Doing Business in Another State
If you plan on operating your Delaware company in another state, you’ll need to protect your company name by filing for Foreign Qualification in that state. If another company already exist with the same name as yours, you’ll have to do business in that state under a Fictitious Name Statement, also called a D.B.A. (Doing Business As) Thus, it’s a good idea to check that state’s database of existing entities to make sure there are no conflicts.
If you do run into a conflict, you may choose to use a different company name that is available in all the states in which you want to operate. You’ll also need to consider if there are any additional restricted words in that state that are not allowed in your company name. Each state has its own list of restricted words. For example:
Restricted Words in New York Company Names:
- Acceptance
- Annuity
- Bank
- Benefit
- Bond
- Endowment
- Finance
- Guaranty
- Insurance
- Investment
- Lawyer
- Loan
- Mortgage
- Savings
Restricted Words in New Jersey Company Names:
- Little League
- Olympic
- Realtor
- Cemetery
- Urban Renewal
These are just a few examples to show you how many possible complications there are when it comes to the name of your new corporation or LLC. At Harvard Business Services, we’ll help you check the name in other states' databases, but you should always search your proposed name on the internet in as many ways as possible and research your states’ rules beforehand.
Naming a Benefit Corporation
One of the most recent members of the family of Delaware corporate entities is the Delaware Public Benefit Corporation, also known as a Benefit Corporation or B Corporation.
Delaware allows for the use of the same corporate endings for Benefit Corporations as are allowed for General Corporations, Close Corporations, and Non-Profit Corporation.
In addition, Delaware Benefit Corporations also have the option of using the following corporate indicators:
- Public Benefit Corporation
- PBC or P.B.C.
However, the inverse is not true, and the endings Public Benefit Corporation, PBC and P.B.C. cannot be used for General Corporations, Close Corporations, or Non-Profit Corporations in Delaware.
Another issue that entrepreneurs may eventually run into with a Delaware Benefit Corporation, since it’s a relative new entity type, is that not all states recognize it. When it comes time to foreign qualify a Delaware Benefit Corporation in another state, this can sometimes complicate the process.
For example, the state of California does not currently recognize Delaware Benefit Corporations and, therefore, cannot distinguish between a Benefit Corporation and a General Stock Corporation. Thus, the corporate endings specific to Benefit Corporations that are acceptable in Delaware are not applicable when registering as a foreign corporation in California.
As of today, the state of California only allows the following corporate indicators for Corporations:
- Inc. or Incorporated
- Incorporation
- Corp. or Corporation
- Co. or Company
- Ltd. or Limited
- PC or Professional Corporation (Professional Corporations only)
The new Corporate Transparency Act (CTA) went into effect on January 1st, 2024. This will change the way beneficial ownership information is reported nationwide. The CTA mandates "reporting companies" to file beneficial ownership information (BOI Report) with FinCEN, the Financial Crimes Enforcement Network, a division of the US Treasury Department. Reporting companies include entities created or organized in the US, as well as foreign-organized entities conducting business on American soil.
If an entity files to amend their company name after submitting the initial BOI report, it is crucial for the company to provide an updated BOI report within 30 days. Staying ahead of FinCEN requirements ensures that your company remains compliant with federal regulations and avoids penalties.
While we do not provide FinCEN filing services, we recommend FincenReport for assistance. They offer a seamless platform for submitting beneficial ownership information (BOI) in compliance with the Corporate Transparency Act (CTA), streamlining the process for efficiency and ease.
Alternatively, reports can be submitted directly to FinCEN.
If you have any questions about naming your new Delaware company, please reach out to us today at 302-644-6265 or via an email at info@delawareinc.com.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
More By Andrew Millman, Justin Damiani