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How Does the Secretary of State Determine Business Name Availability?

As many know, when you form a corporation here in San Diego or anywhere in California, you must specify the name of the corporation (or LLC or Limited Partnership). According to Cal. Corp. Code, § 201(b), a business name is not allowed if the proposed name “… is likely to mislead the public or which is the same as, or resembles so closely as to tend to deceive …” a business name already in use.

It turns out that name availability is surprising complicated. For example, are these two names okay or are they too similar?

Got Ham Company, Inc.
Gotham Company, Inc.

See below for the answer. If you want to form a San Diego Corporation, a good corporate lawyer can make the process quick and simple. Here is a primer on how name availability is determined in California.

San Diego Corporate Law: “Likely to Mislead the Public”

As can be seen from the statute above, there are two broad bases for the California Secretary of State to reject a proposed business name. The first is if the proposed name is “likely to mislead the public.” According to the published regulations, the four most common problems that arise are when the proposed name implies:

Some affiliation or relationship to a government like the State of California or the US government
That the corporation is an insurer when it is not
That the corporation is a professional corporation when it is not
That the corporation is a not-for-profit corporation when it is not

Thus, as the regulations indicate, “San Diego County Sewer Commission, Inc.” would not be allowed because it implies a government affiliation. There are other examples beyond these four. In general, if your proposed business name implies that your business is something that it is not, then your proposed name will be rejected.

San Diego Corporate Law: “Resembles So Closely”

The other broad basis for rejecting proposed business names is when the proposed name “resembles so closely” an existing business name “as to tend to deceive.” Mostly what constitutes “resembles so closely” is common sense. The following are common sense examples of what will NOT make a business name unique:

Capitalization — LoL, Inc. is the same as LOL, Inc.
Adding a number — Burger King, Inc. is the same as Burger King No. 44, Inc.
Variation on the corporate identifier “Inc.” “Co.” and “Corp.” — thus, Able, Inc., Able, Corp. and Able, Co. are deceptively similar
Pluralization — Able Fishery, Inc. is the same as Able Fisheries, Inc.
Letter spacing — Good Time Rest Home, Inc. and Goodtime Rest Home Inc. are deceptively similar UNLESS the letter spacing creates a new word — thus, in answer to the question above, Got Ham Company and Gotham Company are not deceptively similar
Prefatory articles — A Good Company, Inc. is not distinguishable from The Good Company, Inc.
And more

There are a few other interesting lessons from the published regulations including the emphasis on the written name as opposed to the spoken name of the business. Thus, all of these are not too similar:

The Flour Shop, Inc. and The Flower Shop, Inc.
Double A Trucking, Co. and AA Trucking Co.
Cool Cuts and Kool Kuts
Great Picks and Great Pix and Gr8 Picks
Capitol Corp. and Capital Inc.
Jones Tires and Joan’s Tires

In a similar fashion, there is no foreign equivalents doctrine. Thus, “Casa Blanca Enterprises, Inc.” and “White House Enterprises, Inc.” are okay even though they mean the same thing in two different languages. Different prepositions will also make name dissimilar enough to be acceptable to the Secretary of State. Thus, “Kids of Tomorrow, Inc.” and “Kids For Tomorrow, Inc.” are not deceptively similar to each other.

As can be seen, name availability is more complex than one might think.

Contact San Diego Corporate Law Today

If you would like more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard can be reached at (858) 483-9200 or via email. Mr. Leonard has the experience to help you create your corporation (or LLC), keep it in good standing, create and review all the needed corporate papers, and assist with any other business-related matter.