BizReport

RSS feed Get our RSS feed

News by Topic

BizReport : Internet Marketing 101 : May 05, 2021


Naming an LLC [2021 Guide] - How to Choose an LLC Name

You need to find an LLC name that works for your business. To achieve that, use the following tips when naming your LLC.

by BizReport

Naming your LLC is very beneficial. But before you reap the perks of operating as a limited liability company (LLC), you will have to register your business entity. This step-by-step registration process usually begins by coming up with an LLC name.

LLC name carries more weight than you can imagine. It is your legal business name that will appear in all your state's formal documents. In essence, you will be able to use this name in nearly every aspect of your business including setting up your business bank account, signing contracts, and representing yourself in any legal issue you may find yourself in.

Thankfully, you have an opportunity to choose whatever name you would want to use as your LLC name. For that reason, you want to be as creative as possible and come up with the most unique and memorable name. However, your choice might be restricted by your state's legal rules and regulations. For example, most states will not allow you to include words or phrases for government affiliates such as bureau or institutions like banks as part of your LLC's name.

That means you will have to conduct a thorough name search to ensure the name you have chosen is not being used by another business in your state. But our content is not all about name search. We have composed comprehensive content covering various aspects of naming your LLC right from the importance, rules, factors to consider, states to form your LLC among others.

Importance of Good LLC Name
A good LLC name gives a great first impression of your business: Your LLC's name is the first thing your customer sees and interacts with. For that reason, it has to convey the right message.

A catchy LLC name is also memorable: That is, potential clients will remember your company whenever they want products or services that you offer.

A good LLC name sums up everything a company is about: Most consumers don't have time to research and learn what your organization is all about. With a good LLC name consumers will learn what your company is all about with just a glance at an LLC name.

A good LLC name is your unique take on the industry: A good LLC name is more than just a business name; it is the identity of the entire brand. Companies may sell similar products, but what will make customers choose one company over the other? A unique and memorable LLC name is one factor.

With that said, forming an LLC name requires time and attention. You need to check which LLC name is available in your state so that you come up with a unique business name.

The Rule Basics of Naming an LLC
Depending on the state you are forming your business, there are rules and regulations that govern naming a limited liability company. However, we have managed to come up with some general rules and guidelines that will help you create a perfect name for your business.

To come up with a great LLC name, you need to:

Make It Legal
This is the most important part when naming your limited liability company. One way to make your LLC's name legal is by avoiding any restricted word.

For example, New York city forbids an LLC name that includes words like banking, bank, and bank unless your business is really one of them. Therefore, you cannot have an LLC name like "XY banking Ltd" unless you operate a bank. These restricted words are always listed on your state business website.

Keep in mind that other states have restricted words as well, including words related to government affiliates like bureau, insurance among others.

Secondly, your LLC's name must include an indication that your business is a limited liability company (LLC). For example, New York LLC naming requires that you either include the phrase 'limited liability company' or limited or abbreviations such as L.L.C., LLC or LC.
For example, let us say your business name is XY. Your LLC name can be:

XY Limited Liability Company
XY limited
XY L.L.C.
XY LLC
XY Ltd

Make It Memorable
Your LLC's name should be something that people can remember whenever they hear it. Memorable LLC name means that any time a potential customer needs the kind of services or goods that you offer your LLC's name will be the first to come to their mind.

To offer you some tips, the most memorable LLC name is always a made-up word. For example SONY, NIKE, eBay, etc. Besides, a memorable LLC name cannot be a common name.

With that said, your LLC's name cannot be a geographic term or a name that literally describes certain aspects. Consequently, you cannot use a long LLC name such as Clever Word Processing & Management Web Design L.L.C. or Central Word Processing Services Ltd. These can easily be forgotten.

Make It Meaningful
Your LLC name must show people what they expect. In essence, your LLC name must give people a clue of what you do, reflect your mission or values, and take into account what your prospects are searching for in the most simple and unique manner.

Make It Original
This is very important particularly if your LLC company is internet-based. The popular online companies have original names that are why they stand out from the rest of the competitors.

Your LLC name must not be similar to any existing business name or have any likelihood of confusion with the existing business names within your state. For that reason, you require a thorough domain name search to ensure your chosen domain name is not being used by another business in your state.

Make It Distinctive
As a rule of thumb, you will not be allowed to use an LLC name similar to a business name that has already been registered under someone. For that reason, you need to brainstorm and compose a list of the LLC names out of which you would select the name for your LLC.

The names should be distinctive and not in any way similar to the existing ones. Many states forbid names that may bring confusion in the near future, so come up with a unique and distinctive name.

The good thing, most state agencies that offer business name formation services provide a searchable database of business names registered in the state (including the database of the US Patent of Trademark office). For each of the names on your list, conduct a thorough name search as you eliminate the ones that have already been taken by other businesses.

Make It Domain Name Ready
The right domain name can help or break your business. Domain names will help you maintain a business presence.

Having said that, you need to make your business name domain name ready. To do that:

  • Make a list of domain names
  • Find a domain registrar
  • Check if the domain names included in your list are available for purchase

Best State to Form LLC: How to Choose an LLC Name

The ease with which you will form an LLC will depend on your state of choice. In essence, dealing with your home state is very convenient since you are conversant with the office and the existing business law.

However, some out-of-state LLC formation comes with more benefits than forming an LLC in your home state. For example, some states are known to offer cheaper LLC formation services and low tax charges than other states. Here are the examples of states with better LLC formation services:

Alaska
Alaska is one of the best LLC to create an LLC and many businesses are now making a switch to the state. This is because Alaska is a state that charges no income tax or sales tax. To be precise, Alaska offers one of the best tax benefits. For that reason, companies are sure to save a lot by filing their LLC in the state.

Besides, you are guaranteed asset protection, single-member protection among other benefits.

You can hire an attorney or use online LLC formation services to create your LLC in Alaska with a lot of conveniences thanks to the guidance from the secretary of state as you file your articles.

Delaware
Delaware has a solid reputation when it comes to business friendliness. They offer several LLC advantages right from great processing speed to protection. Even more, Delaware doesn't charge income tax yet charges one of the lowest franchise tax.

But the best part is Dalawere's unique Chancery Court, which handles only business matters. With that, cases that involve business matters can be handled much faster in Delaware than in any other state.

To name your LLC in Delaware, it is worth noting that you are not allowed by the state to include words like bank, banking, and Banc.

Florida
Forming an LLC in Florida comes with several benefits. To begin with, they offer helpful information and clarification as you form your LLC. Besides, they don't charge individual income tax and also offer a low average effective property tax rate. Florida secretary of state will walk you through as you file LLC articles whether you hire an attorney or opt for online LLC formation services.

To form an LLC in Florida, your company name must not include reserved words such as a bank, banking, banc, and insurance.

Nevada
Nevada doesn't tax personal income, inheritance, or capital gains. Nevada doesn't have franchise tax, no requirements for the annual meeting or operating agreement, no information-sharing agreement with the IRS, or any other form of disclosure. With all these perks, they still offer one of the fastest processing speeds.

South Dakota
South Dakota doesn't charge both corporate tax and individual tax rates. This makes it a great option for those who would want to form a corporation as well. Even more, South Dakota offers one of the most robust personal and business protection from creditors.

Wyoming
Wyoming is another solid State to file your LLC. Like Nevada, there are no franchise taxes. Even better, they have a life proxy that allows a better anomaly than most states, including Nevada.

Wyoming also offers great entity protection than most states you will find out there. Other benefits of forming an LLC in Wyoming are best asset protection, perpetual life, transferability of ownership, among others.

Legal Name vs Brand Name

A legal name is the official name of the individual or entities that own the business. This is the name you use on your business paperwork or state's government forms.

In essence, registering a name for your LLC only establishes that name as your LLC's formal name but does not prohibit other companies in other states from using the same LLC name as their legal business names.

However, a brand name when registered with USPTO becomes a national trademark that no one else can use. A brand name is actually a form of trademark that you can use to market goods and services. Registering a trademark gives you the right to use the brand name without the worry of infringement. There are federal and trademark laws established to protect your brand name from infringement once registered.

Bonus Tips to Avoid Common Business Naming Mistakes

Conduct a name search on your state's various databases to ensure your LLC name is not among the existing ones.

Ensure the LLC name is not too long; for example, Central Word Processing Web Design L.L.C. Simple names are easier to read, memorize and navigate social media. A good example is Spider Web Design L.L.C.

Your LLC name should not be misleading to the nation. For example, it should not imply a false government affiliation and for that reason, words related to government affiliations such as bureau, municipal, or board among others, should be avoided.

The LLC name should not be difficult to spell or pronounce.

Avoid relying on generic words or descriptors that can easily be forgotten
Avoid LLC names that are likely to bring confusion with the existing words in the future.
Don't forget to reflect your LLC name on other existing brand identities such as brand name or logo.

Strictly follow your state naming law for your business.

Conclusion
When you are ready to create your LLC name, start by choosing the most business-friendly state, then come up with a list of LLC names based on the rules and regulations we have offered in this content. After that, conduct a thorough name search to sort out the names that are already in use. You can also search to see if your domain name is available.

Thankfully, there are online LLC formation services that will help you keep things simple. If you can find the best service, you are sure to have a smooth ride on naming your business. Feel free to browse our website to learn the best LLC formation service.

Frequently Asked Questions

1. Do I really need to buy the domain after creating an LLC?
An LLC doesn't have to be in a domain name; it is not a legal requirement. However, if you decide to put LLC in the domain for your business, there is no way you can reserve a domain name without purchasing it. Thankfully, domain names are affordable.

2. What About Businesses with Similar Names in the Other States?
Having companies with similar names in other states is usually not a cause of concern. An LLC name is registered with a state and expected to operate within the state.

3. How do I conduct a business name search?
The websites of most state filing agencies include an online entity name search tool. You can use the online business name search tool and find out whether or not another business is already using the name you have chosen.

4. Does my LLC name matter?
An LLC is mostly a form of liability protection not to protect your trademark. However, it can serve as a trademark to new businesses or rather small ones. For that reason, an LLC name is not a must-have for an organization.






Tags:








Subscribe to BizReport






https://www.bizreport.com/2021/05/naming-llc.html

 

 

Copyright © 1999- BizReport. All rights reserved.
Republication or redistribution of BizReport content is expressly prohibited without the prior written consent.
BizReport shall not be liable for any errors in the content, or for any actions taken in reliance thereon.