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How to Create and Reserve Your Business Name

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Did you know reserving your business name is a great way to prevent other startups from using the idea? Finding the perfect word combination for a company challenges many executives, making it ideal to set aside your dream identity.

This method is ideal for entrepreneurs who aren’t ready to form a corporation or limited liability company. There are guidelines and state requirements to ensure it’ll be available to kick-start your organization when ready.

Do you want to learn the state requirements to fill out the reservation form? Join us as we discuss everything you should know about the process without breaking the law. Let’s get started.

Why do I need a business name reservation?

Reserving your business name means preventing other entrepreneurs from establishing a company with your idea for a defined period. The idea is to protect your organization while preparing the Articles of Organization or Incorporation.

Another reason to reserve a name is that it’ll be available exclusively when you’re ready to register your business.

Most states require a name availability check before approving a reservation. It saves you the heartache of spending effort, time, and money on a business with an illegitimate identity.

Business name reservation requests vary from state to state but are typically valid for 120 days. Entrepreneurs not filing for company formation paperwork the right way should adopt this approach.

Guidelines for choosing a business name

Choosing a business name is a thoughtful process that requires guidance to avoid falling on the wrong side of the law. Some of them include the following:

Portray the right image

Consider how you want customers to view the company before creating a business name. It’s best to portray the right visuals representing your identity and communicate it to clients. It shows them who you are, which builds trust and confidence and guarantees exposure.

Don’t choose names similar to existing companies

Most states require an entrepreneur to choose unique characters that are easily distinguishable from other existing companies. Ensure the name you desire is available by conducting an extensive search. Visit state offices and agencies to check if an entrepreneur has the term reserved for future purposes.

Select a name people can pronounce and spell

Another must-follow rule when selecting a business name is choosing an identity that people can pronounce. Customers often get tired of long, difficult-to-spell words, which spell doom for your company.

Choose simple and memorable words that are easier to remember and relatable, as it’s a factor that can determine business success. Don’t get overly cute with complex acronyms or spellings. Don’t use a description that implies a government unit, such as cities and villages.

Keep it Short

A short name is easy to search online and helpful for promotional purposes. You want clients or customers to remember your business name and talk to others about your services.

Choose the right combination of words as it yields higher traffic, making your website rank on search engines. Avoid using obscene or discriminatory language that promotes abuse.

Identify the business type (Inc, Corp, LLC)

Many states emphasize adding identifiers to business names for corporations. Including limited liability companies (LLC), Inc, or Corp might become necessary in your jurisdiction.

State Requirements for Business Names

Ensure your dream business name meets state requirements before applying for a reservation. Every jurisdiction has its laws guiding new and seasoned entrepreneurs.

For example, in some states, you cannot use certain words like insurance or bank for business names without permission. Central, union, national, undertaking, authority, board, commission, and federal are other terms that may require validation.

Visit the Secretary of State Website or legal statutes to find your location’s business name requirement. Consider consulting a professional for necessary advice if finding the information becomes challenging.

How to check the availability of your proposed company name

You’ll find an online business search tool on most states’ websites. Search engines such as Google, Bing, and yahoo are other locations to search.

Type your dream company name in the box and click enter to see if it’s in use. Ensure you check the internet for singular and plural forms with variations to cover all areas.

The search is necessary because the authorities can reject your organization name if it’s similar or identical to active ones. Also, your LLC doesn’t get trademark rights for registering or reserving a business name.

You might unintentionally infringe if your desired combination is similar to another organization’s legal words, badge, or symbols.

File a name reservation form

The name reservation process differs in each jurisdiction, but many Department of State provide forms for entrepreneurs upon request. It comes as a fee, so you can obtain it, fill and submit it in person, by mail, or online. When you have it, follow the below procedures:

  • Fill in your dream company name to reserve
  • Confirm the name availability
  • Select who’s incorporating the company (you or your employer)
  • Prepare and add supporting documents or written approval to use restricted words.
  • Complete other sections of the form and submit when filing online.

The filing fee varies widely by state. For example, the reservation may cost $60 in Connecticut but only about $15 in Kentucky.

Wrapping up

Consider providing the necessary information when reserving your business name to avoid rejection. If the department of state refuses your application, you’ll have to complete a new reservation with an additional fee. It’s also best to work with a tax attorney every step of the way.

About Author

Rick Mak

Rick Mak

Rick Mak is a 30-year veteran businessman, having started, bought, and/or sold more than a dozen companies. He has bachelor's degrees in International Business, Finance, and Economics, with masters in both Entrepreneurship and International Law. He has spoken at hundreds of conferences around the world during his career on entrepreneurship, international tax law, asset protection, and company structure. Business Anywhere Editorial Guidelines

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