What’s in a Company Name?

Find a Customer First. So you want start a “company” (any type of entity whether LLC, company, etc.) but you can’t get started because you (and your partner if you have one) can’t decide on its name. And you’ve been brainwashed that no success will come to any business without a really cool name – and you probably NEED a logo, a tag line and of course business cards, stationery and on and on.... And its always more fun to do the creative stuff anyhow so you are tempted to do it first. Here’s a little secret. Your company name (logo, business cards, etc.) won’t generate any revenue, won’t pay the bills and won’t dictate your success out of the box. That’s what your customers do after they’re happy with your product or service.

Another nugget – changing your company name can be a very simple and inexpensive step in the early days (as little as $50 filing fees with your state of organization and maybe some modest legal fees to walk you through it). That cost of course goes up considerably if you’ve spent (invested)....time... and big bucks on stationary, logo, cards, etc. So another suggestion – you likely don't have much capital and don't have enough time to do everything you need to do - so spend what you do have (time and money) to find a customer who will pay you MONEY for your products or services before you "invest" your limited resources on “Branding." If your good looks, charm and enthusiasm can’t sell what you are offering, then the coolest name, logo, tag line, won’t do it either. There is little certainty except change – so keep the cost of changing your name to a minimum and don’t invest - your time or your money - prematurely. In Charlotte - even First Union National Bank changed its name....and boy was it expensive - BILLIONS!!! They disguised the name change with a multibillion dollar acquisition of a smaller bank - Wachovia - and they threw in a world class PGA event to boost at the same time! The Wachovia Championship. http://www.pgatour.com/tournaments/r480/

Three Paradigms of Names. And if you do form an entity, what exactly is it with all the naming stuff...? I find the easiest way to think about company names is to consider three independent (yet parallel) universes of names - all driven by different areas of the law of course!

First is the universe of corporate law - your “corporate” or legal name. This is the name you put down in your company’s articles of organization or incorporation that you (or your lawyer) filed with the Secretary of State. Under state corporate law the legal name of your entity is subject to state specific requirements or limits. First, you can not have the same name as a pre-existing entity. Additionally, in North Carolina an entity can not use the term “Bank” in its name unless it is registered as a bank with proper federal or state authorities. Finally, you must include the proper term to indicate the entity has “limited liability” such as LLC, Co., Company, Inc., and so on. By establishing a legal name with the state – you have entered it into a statewide database – nothing more. If someone wants to track your entity down (to sue you....ouch!), they go to the secretary of state, look up your company’s name and file a lawsuit – specifying your company by its name as the defendant. They send a copy of that lawsuit through the court to the company’s designated “registered agent” at his, her or its address – which you put in that document right after your legal name. Other than that – your name registered with the state does little for you. You can however look forward to some junk mail within a few weeks from a few people who use that list for lead generation – and you should too if new entities are your target customers!!!

Second is the universe of the world wide web - your domain name. This name is easy for anyone under 30. This is your address on the world wide web or the Internet that you obtain when you register for a “domain name” with ICAN Project https://ican.doe.state.in.us/ through one of the domain name registries (such as GoDaddy). You pay a fee to have the right to use the specified name and an appropriate extension for a specified period. For example - “companyname.com” Your legal name with the state assures you of nothing….so be sure to check for the domain name availability before you spend any money. Without compelling intellectual rights described below, there is little chance you can obtain the domain name once it is taken (unless you are willing to pay big bucks). A little note, make sure the person who registers for the domain name is someone you trust and try to put it in the name of the company, if possible. Interestingly, many people register the entity's domain name before the entity is formed - so be careful here. You can see where this goes if the ultimately excluded partner is the one with the domain registrations - HOSTAGE CRISIS (another good topic on its own).

Third is the universe of intellectual property law - Trademark or Service mark. From the USPTO - http://www.uspto.gov/main/trademarks.htm
What is a trademark or service mark? A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others. A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product.

Do Trademarks, Copyrights and Patents protect the same things? No. Trademarks, copyrights and patents all differ. A copyright protects an original artistic or literary work; a patent protects an invention. For copyright information, go to http://lcweb.loc.gov/copyright/. For patent information, go to http://www.uspto.gov/main/patents.htm.

In any event, you should also consult with an intellectual property lawyer if trademarks or service marks are important to you or your business.

As an aside, you do begin to acquire limited common law rights to your trademark/service mark merely by using it in commerce. However, federal registration with the USPTO provides far more pervasive rights (and even before you begin to use the mark in some situations). While it may be expensive $1000 to $2000 to pursue a registered mark, it offers far more pervasive rights. Contrary to popular opinion, filing for the legal "corporate" name when you formed the entity does nothing for you in terms of your intellectual property rights. At the very least you must use the name in commerce – and at best, register it with the USPTO. In certain limited instances, a strong mark, with recognizable intellectual property rights, can be used to remove a squatter to obtain the same domain name – but if you are a start up don’t count on it.