Your business can have many names. Its official registered entity name, “doing business as” or “trading as” name, trade name, or fictitious name. Throw trademarks and URLs into the mix and it can get very confusing. Which names do you need to register for what purpose? Who can use what name and how? Let’s talk about these various “names” and see if we can make some sense.
- Entity names
This is the “official” name of your business entity you chose when you organized the business, as listed with and identified by the appropriate state corporation department (the SCC in Virginia, DCRA in DC, and SDAT in Maryland). Think of them as the name appearing on your birth certificate, such as, Norma Jean or Robert Zimmerman. Generally, as long as the name is distinguishable from the registered name of other existing entities in your state, you will be able to use that name as your “official” business name. For example, if there’s an existing corporation that is registered as “ABC, Inc.” you will not be able to incorporate a new corporation with the same, or similar, name. Most states require that corporations use “Inc.” or “Corp.” and limited liability companies use “LLC” or “LC” at the end of their names. Some special types of entities, such as professional corporations or professional limited liability companies, usually have additional restrictions on their names. - Trade names
These are the “doing business as” or “trading as” names that businesses often use instead of their actual entity names. Sometimes they’re called “fictitious names.” So think of them as Marilyn Monroe or Bob Dylan. Depending on your jurisdiction, you will need to register your trade name with a state and/or local government agency in order to be able to use that name instead of, or in addition to, your business’ actual registered name. For example, in Virginia you need to register your trade name with your county and the SCC (if you’re a sole proprietor, you only need to register with the county). While this registration on its own does not give you any exclusive right to use the name, it is a legal requirement for you to be able to do business under that name. - Trademarks
A trademark can be words, logos, designs, slogans, etc. that identify goods or services provided by a business. You can trademark your business name (such as McDonalds), products (Big Mac), or slogans (I’m loving it), or a design (the golden arches). Owners of trademarks have exclusive use of the trademark and can sue others for infringing on their marks. You can obtain a trademark by 1) applying for federal registration with the U.S. Patent & Trademark Office, 2) applying for registration with your state, or 3) by using your trademark without registering it. In the last instance, you’ll have what’s called a common law trademark.
PRACTICAL COUNSEL
So what does this all mean? An entity can have an actual name of ABC, Inc. while trading as XYZ Widgets, as long as it properly registered that that other “trade” name. Not registering a trade name can invalidate business agreements entered into with the trade name, and/or result in your losing the right to use the trade name, and face local and/or state monetary penalties.
Does the registration of a trade name mean other businesses can’t trade as XYZ Widgets? Not really. Depending on your jurisdiction, duplicate trade name filings may or may not be allowed. Since a trade name registration in itself may not give you the exclusive right to use your trade name, it is possible that someone else might also be able to register and do business as XYZ Widgets. To protect and establish exclusive use of the name, or mark, of your business, product, or service, you’ll want to obtain a registered trademark.
While many of these requirements are not difficult to satisfy, there can be significant negative consequences if not done correctly. Therefore, you should seek competent legal counsel to guide you through this process if you intend to do business under a name other than the “official” registered name of your business or wish to apply for trademark registration of your business, products or services.
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General Counsel, P.C. – Every Business Needs a General Counsel: Led by Norman Eule, General Counsel’s Business and Tax Practice Group has over 40 years of professional experience in counseling business owners on all aspects of commercial transactions. Our attorneys have extensive experience representing a wide range of local, regional, and national companies and business ventures. If you have any questions regarding the effect of the new solicitation rules on your company, or any other business law related questions, please contact either Norman L. Eule or Robert Lee.