San Diego Startups: What’s in a Business Name?
When you think about starting up a new business, the first thing most people think of is a name. Usually, people choose a name for the business that is special to the people starting the business. Maybe something about father and son, or Maria and Sally as best friends or something just as unique. Sometimes the name is about location such as “Meadow Grove Industries” or a profession like “Phipps Law Firm.” A business name is more than just something memorable to the owners. The business name must also identify what type of business it is and must not conflict with other existing business names. A startup must also decide if the name of the business is going to be the name used for signage or whether a fictitious business name is going to be used. In the internet age, how you want to name your website might impact what name you choose for your business.
What Type of Business Entity?
In California, a startup has many options on what type of business entity to choose. Among them are:
- Corporation — “C-Corp” “S-Corp“
- Limited liability company (LLC)
- Sole proprietorship (SP)
- General partnership (GP)
- Limited partnership (LP)
- Limited liability partnership (LLP) (only for some types of professions)
There are advantages and disadvantages to each type of entity involving taxation, protection of personal assets, protection from the malpractice of business colleagues, who runs the business, who must contribute capital to the business, record-keeping, business formalities, etc. A skilled and talented San Diego business attorney can provide advice on which is the best entity form for your new business.
What is important for today’s article is that your business name comply with the choice you make for your business entity. Thus, corporations SHOULD have one of the designations “Inc.”, “Incorporated”, or “Corporation” in their name to designate their status as a for-profit corporation (nonprofit corporations typically omit the corporate designation). A limited liability company MUST have the designation “LLC” or “L.L.C.” in their name, a limited liability partnership MUST have “LLP” in their name, and a limited partnership must have “LP” in the name.
The Name Must Not Conflict with Existing Names
Once you have decided what name you want for your new business, you must check to ensure that the name does not conflict with other names. As we discuss here, you should check with the California Secretary of State to make sure your proposed name is available in California. Likewise, a quick check with the US Patent and Trademark Office should be done to make sure that your proposed name is not a trademarked name. You cannot start a “Burger King” restaurant because that name is already being used and is trademarked. You probably cannot even use “Mary’s Burger King.”
What is a Fictitious Business Name?
Most people just use the name of their business for everything including signage, letterhead, bank accounts, etc. Sometimes, a San Diego business will start a new business with the intent to use a fictitious business name. As an example, if you want to start two related businesses — say a vending business and small convenience store — you can form one company but use different names for the vending side of the business and for the store side of the business. This is what is meant by fictitious business name. If you use any business name other than the exact name of your corporation or LLC or partnership, then you are using a fictitious business name. Using our example, if you incorporated as “Caleb’s Convenience Foods, Inc.,” but the sign on your vending machines is “Caleb’s Vending,” then you are using a fictitious business name.
If you plan to use a fictitious business name, you must register your fictitious business name with the county clerk and publish a Fictitious Business Name Statement in a local newspaper. Cal. Bus. & Prof. Code §§ 17900 et seq. In San Diego County, you go to the Clerk’s website and find Form CC230 and additional instructions. See here. Certain corporate entities have special requirements regarding the verbiage used in a fictitious business name, so it is important to have a skilled business attorney to help you determine what will and will not work for your business specifically.
Your Business Name and Your Website Domain Name
In today’s market, every business needs a website. So, one additional step before finalizing your business name is to check and make sure your domain name is available. Many people want their domain name — the name of your website — to be the same as their business name. This is good business practice, although it is not legally required. If your proposed business name is already taken, you may want to choose a different business name.
Contact San Diego Corporation Law Today
If you would like more information on choosing a business name and starting up a new business, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard has been named a “Rising Star” for 2017 by SuperLawyers.com. Mr. Leonard can help explain the law and your rights and offer advice on many aspects of starting a new business. Mr. Leonard proudly serves the San Diego area, offering a full range of legal services to his business clients. Mr. Leonard can be reached at (858) 483-9200 or via email.