Choosing a Legal Name for Your Inventing Business

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Your legal name is the official name of your inventing business. It is the name you must always use when you sign legal documents (for example, contracts), file tax returns, sign leases, apply for bank loans or file lawsuits. If you are a sole proprietor, your legal name is always your personal or “true” name -- for example, Jon Wilcox, sole proprietor. If your business is a partnership, LLC or corporation, you must choose a legal name.

Sole Proprietor Inventors

Your legal name depends, in part, on what legal form your choose for your business. If, like the vast majority of self-employed inventors, you’re a sole proprietor, your personal (or “true”) name will always be your legal name. It couldn’t be simpler.

EXAMPLE: Joe Dokes runs his invention business as a sole proprietor. Therefore, his business’s legal name is Joe Dokes. This is the name he’ll use to sign contracts, file tax returns and so on.

Inventing Partnerships

If your business is any form other than a sole proprietorship, you must choose a legal name.

Partnerships. In the case of partnerships, you can choose the last names of all the partners as your legal name -- for example, Wilcox, Smith and Hutton -- or choose a more creative legal name -- for example, the Great Widget Partnership. If you use a name other than your last names, you should draft and sign a written partnership agreement and list the name in the agreement.

LLCs and Corporations

If you create a corporation or an LLC, you must choose a legal name. Like racehorses, corporations must have unique names. Once you decide upon a name, you must get permission to use it by registering the name with the appropriate agency in your state (usually the secretary of state’s office). 

Registering a corporate name involves three steps.

Step 1. Selecting a permissible name. All but three states—Maine, Nevada and Wyoming—require you to include a word or its abbreviation indicating corporate status, such as “corporation,” “incorporated,” “company,” “limited.” Several states also require that the name be in English or Roman characters.

Step 2. Clearing your name. Next you must make sure that your corporate name is distinguishable from any corporate name already registered in your state. Your state won’t register a corporate name that too closely mimics a name already on file. The secretary of state or other corporate filing agency will do a search for you prior to authorizing the use of your name. In about half the states, you may phone to check on the availability of a name in advance. In the others you must write to request a search. Often you may request a search of more than one name at a time.

Step 3. Reserving your corporate name. A corporation can usually reserve a name before incorporating if the name otherwise qualifies for registration. This freezes out other would-be registrants of that name or names that are deceptively similar during the period of reservation, usually 120 days. Most states permit you to extend the reservation for one or more additional 120-day periods for additional fees.

The reservation process involves sending an application for reservation to the Secretary of State, or the designated office, with a fee. Some states even permit you to reserve a corporate name over the telephone. You can find out the exact information by calling the secretary of state or corporate commissioner in your state.

Registering a name for a limited liability company (LLC) is very similar to registering a corporate name. You must choose a name conforming with your state’s LLC requirements. Most states require you to use the words Limited Liability Company, Limited Company or abbreviations in your name.

You then call your state LLC filing office and ask personnel there to do a search to see if the name or names you’ve chosen are available. Most states allow you to reserve LLC names for 30 to 120 days by paying a small fee, usually no more than $50.