As we prepare Articles of Incorporation for new corporations and Articles of Organization for new LLCs, we get a lot of questions about how to choose a name for your LLC or corporation.
Naming your company can be a very important decision. There are many considerations.
In this article, we’re going to talk about some technical requirements on naming, as put forth by the California Secretary of State. The subject matter is a little dry, but we hope it will help you decide what name to choose for your new LLC or corporation.
First: The Search for Existing LLCs or Corporations.
The name cannot be the same as another existing LLC or corporation. Many states provide a simple online names search on their Secretary of State website. For example, if you’re forming in California, you can go to the California Business Portal Business Search, and search for the LLC or corporation name you hope to register.
If your search shows a company already formed with the name (and their status is “Active”), then you’ll need to consider another name.
In many cases, the exact name is not taken, but there are other active companies with names that are very close.
So How Close is Too Close?
Generally speaking, it should not be so close to another business’ name that it would be easy for a reasonable person to confuse them. The California Secretary of State’s office seems to give themselves a little leeway, and we’ve seen them rule in different ways.
That said, there are regulations that spell out pretty clearly how they are supposed to rule. The California Code of Regulations chapter on Business Entity Names says the following:
Section 21002. Same or Deceptively Similar Names.
(a) …the Secretary of State shall not file a document or grant a name reservation that includes a proposed name that is the same as or deceptively similar to an existing name.
OK, but what does “deceptively similar” mean?
Again, from the California Code:
“Deceptively similar” means to resemble so closely as to tend to deceive. A resemblance is considered as tending to deceive when a person using that care, caution and observation which the public uses and may be expected to use, would mistake a proposed name with an existing name.
Examples:
- Sampson, Incorporated, Sampson Corporation and Sampson Ltd. are deceptively similar to each other.
- Northwest Services Limited, Northwest Services Company and Northwest Services are deceptively similar to each other.
- Grandma’s Cookies, Limited Liability Company and Grandma’s Cookies, LLC and Grandma’s Cookies, Ltd. Liability Co. are deceptively similar to each other.
- A B C Corp, AB C Corp. , A.B.C. Corp. and A-B-C Inc. are deceptively
similar to each other.- Good Time Rest Home, Inc. and Goodtime Rest Home Inc. are
deceptively similar to each other.- D.R.E.A.M. Incorporated and Dream Corporation are deceptively similar
to each other.
- Got Ham Company and Gotham Company are not deceptively
similar to each other.
Crystal clear, right?
There’s one other section that identifies that 3 types of naming problems that we see the most. Your proposed name will be considered deceptively similar if it consists of:
- The addition or absence of a numerical expression or a compass direction;
- The addition of a geographic designation at the beginning or at the end of the name or
immediately preceding a business entity ending; or - The addition or absence of the word “holding” or “holdings”.
Examples:
- For #1, you can’t be “Burger King No.57, Inc.” if there is a “Burger King No. 5, Inc.”
- For #2, you can’t be “Johnston Financial Santa Barbara, Inc.” if there is a “Johnston Financial Riverside, Inc.” or even a “Johnston Financial, Inc.”
Generally, if we think its a grey area, we can run a name check with the Secretary of State, who charges a small fee for the service.
Alternatively, we can go ahead and file the Articles of Organization with the name you hope for, and if they reject it for closeness to another name, we would just refile the Articles with your second choice. With the latter strategy, you’re mainly just losing time if the first name is rejected. But there is always the chance your papers will be handled by a Document Specialist who will put it through.
Contact us, and we’ll help you decide if its worth filing your desired LLC or corp name on your Articles of Organization or Articles of Incorporation.
We’re here to help.
Here is the full PDF referenced: California Code of Regulations: Business Entity Names.
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