This article provides best practices on how to select a good company name when creating a new corporation. It is the third article in the "How to Create a Nonprofit Organization / Corporation" and fourth in the "How to Incorporate a Business (For-Profit)" series.
Every for-profit corporation and nonprofit organization needs a unique business name that identifies the entity and which also complies with state law. Creating a name for your company may seem an easy task but it will be more challenging than most people think. In order to do so, you will need to find a name that has not yet been registered in your state as well as making sure that your business name complies with state requirements.
Compliance with State Naming RequirementsThe state law regarding corporate naming requirements can usually be found on the website of your Secretary of State and/or the state division of corporations. These agencies typically offer a searchable online database where you can determine if someone else has already registered your desired business name in your state. State rules, requirements and conventions governing corporate names are similar nationwide and mostly the same for naming nonprofit and for-profit corporations. Generally, corporate names must adhere to the following requirements:
- You cannot choose the same name as another corporation that has registered with the filing office in your state (although two companies can have the same name provided they are filed in different states.) The state may also not allow you to register a corporate name that is too similar to another company already registered.
- Corporate designators must be used at the end of the nonprofit corporation’s name such as “Limited”, “Incorporated”, “Corporation”, “Ltd”, “Inc” or “Corp”. This is a requirement in a majority of states in the United States but check your state for the specific law.
- There are several words that may be prohibited from use in your nonprofit corporation’s name such as “Federal”, “United States”, “Cooperative”, “Bank”, “National” or “Reserve”.
- In New York State, for example, the following words cannot generally be used in the formation of a corporation unless special approval is obtained from the state governmental agency:
- acceptance, annuity, assurance, bank, benefit, bond, casualty, doctor, endowment, fidelity, finance, guaranty, indemnity, insurance, investment, lawyer, loan, mortgage, savings, security, title, trust, underwriter
- union, labor counsel, blind, handicapped
- Any word suggesting that the corporate entity is a school, educational institution or day care center
- These words cannot be used: board of trade, state police, urban development, chamber of commerce, state trooper, urban relocation, community renewal, tenant relocation
Check for Potential Trademark Infringement ClaimsIn addition to checking your state’s online corporate database to ensure that a proposed business name is available, you should also to a trademark search to determine whether your corporate name might potentially infringe upon a trademark. You can check to see whether a trademark exists by searching your state corporations database but it is highly advisable to search for a federal trademark that creates nationwide protection for a name. You can search the trademark database at the United States Patent and Trademark Office.
In the event you discover that the company name you like has not yet been registered, you can reserve that name by paying a small fee and following up later with the required paperwork. This situation typically occurs when a person wants to register a corporate name but isn’t quite sure what type of corporation to choose or may need to fill out paperwork later. You may also want to consider filing for a trademark if you have a unique name that you’d like to protect nationwide from usage by another person or entity. The costs for filing a trademark are significant ($325 or more) so this is a decision that you should think about carefully. You may wish to hire an experienced trademark attorney to assist you and also perform expert searches to determine if a conflict exists with your name that you may not have discovered on your own.
Register a Good Domain NameIn this age of the Internet, it is of vital importance to ensure that your corporation or non-profit organization has a good, marketable domain name. Even if a trademark does not exist that would prevent you from using your chosen company name, that name or something similar may already have been registered for a domain name by another person or entity on the Internet. For example, if your non-profit organization’s name is “City Donations” and another company owns the domain citydonations.com, you could have a problem even if there is no current usage of that domain name. If you purchase a similar variation such as citydonation.com or citydonationsinc.com, you will want to make sure that it is not confused with the shorter domain. You may also consider whether you should use another “top level domain (TLD) such as citydonations.org – a TLD usually recognized by Internet users as associated with a non-profit organizations. You can find and register a good domain name at a reputable an accredited domain name registrar, which can also provide you with a search method and ability to find variations of a preferred domain name.
The next article in this series is "How to Select a Good Board of Directors".
- Business, Corporate & Nonprofit Law:
- Formation of a Business
Formation, LLC, Corps How to Choose a Good Company Name & Brand
By Michael M. Wechsler |
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