How Can I Ensure my Corporate Name is Available for Use?
After deciding to incorporate your business, one of the first steps of incorporation is to decide upon a legal name for the business. For each prospective name, it is important to determine whether the name you have chosen for your corporation (or, similarly, the name of your limited liability company, or partnership) can be used by the business. Though many business founders simply assume the name they have chosen will be accepted by the California Secretary of State, that is not necessarily the case. Names used for business entities may generally be used so long as:
- For corporations if it is “not the same as or too similar to an existing name on the records of the California Secretary of State” and is not “misleading”
- For limited liability companies, it is “distinguishable on the records of the California Secretary of State” and is not “misleading”
- For a limited partnership, it is “distinguishable on the records of the California Secretary of State”
While the availability of your name can be checked by submitting “Name Availability Inquiry Letter” to the Secretary of State, merely “checking” for the availability will notensure that your articles of incorporation will be accepted. Indeed, simply checking on name availability may result in rejection of your articles on the basis that your name is too similar to an existing name on the Secretary of State’s “records,” that is because submitting, and obtaining a response to, the Name Availability Inquiry Letter takes a substantial amount of time. During the time you are waiting for a response, another business may file their articles, containing the same or a very similar name, resulting in the name being “taken” before you have been able to file.
The solution to the obvious dilemma posed (not knowing whether you will ultimately be able to use your name) is easily solved, however. California Corporations Code Section 201(d) [effective January 1, 2016], provides in pertinent part “[a]ny applicant may…obtain from the Secretary of State a certificate of reservation of any name not prohibited by [law], and upon the issuance of the certificate the name stated therein shall be reserved for a period of 60 days…” While there are certain restrictions on reserving corporate names (apart from whether they are similar to other names or misleading) it would behoove anyone contemplating filing articles of incorporation to reserve their name to ensure their name will be accepted by the Secretary of State.
Each business and business entity is unique. To understand the different options and which direction will be best for your situation, you need to consult with an experienced corporate attorney. Michael Leonard, Esq. of San Diego Corporate Law, named “Best of the Bar” by the San Diego Business Journal in 2016, has the expertise to guide you through everything from forming your business, to creating buy-sell agreements, to executing contracts, and anything in between. To schedule a consultation to discuss any business-related matter, please contact Mr. Leonard by visiting San Diego Corporate Law or by telephone at (858) 483‑9200.