How To Pick a Name For Your Business

Jan 18, 2016 By Levi Hatch In Business No Comment Tags : , , , ,

You probably know that forming a business entity is one of the easiest ways to protect yourself as an owner from business liabilities and you are probably aware that some tax benefits can flow from business formation as well. One of the first steps in organizing a business entity, aside from meeting with an attorney, is picking a name for your business. This post will discuss the process of picking that name.

Although the actual body varies from state to state, there will be a governing authority such as the Secretary of State or corporation commission that oversees the formation and registration of corporations, limited liability companies, and partnerships. In Arizona, the Secretary of State manages the registered partnerships while the corporation commission maintains the record of LLC’s and corporations.

Because of the potential depth of this topic and also because most entities are created as LLC’s, this post is going to focus there. There are generally three rules that have to be followed in picking a name for the LLC:

  • The name must be available and not taken by an existing entity in your state. Each state has some type of online system that allows for a word search of existing entities. It is fairly straightforward to search for the name you want and see if it is taken. If the name you want is taken then consider making modifications by deleting words or adding new words such as “enterprises” or “holdings.” Although it is not absolutely required, it would also be a good idea to run a search for any conflicts with registered federal trademarks before filing.
  • A limited liability company name will end with either “LLC” or “PLLC”. I get asked about the difference between the two quite often so let’s answer that now. A PLLC is an LLC that provides a service that can only be provided by a licensed professional. The PLLC designation is optional in most cases unless specifically required by the licensing board, i.e. a dentist licensed by the state could organize as an LLC or a PLLC. In Arizona, professional real estate and cosmetology businesses must use the PLLC designation.
  • The name will not contain any words forbidden under state law. LLC names usually cannot contain the words “association”, “corporation”, “incorporation” or abbreviation of those words. There is also a large set of words or phrases related to financial institutions such as “bank” or “deposit” that cannot be used without prior approval from the state’s body that licenses financial institutions.

A name that satisfies these three rules is generally guaranteed to be approved by the state; although I would also suggest avoiding the use of profanity, making personal attacks or implying criminal activities in the name you choose.

If you are thinking about organizing a business or have questions about how to set it up the right way, an experienced business planning attorney at Nielsen Law Group is available for a complimentary review of your situation. You can schedule your initial consultation by calling (480) 888-7111 or submitting a web request here.