• Lisa D. Mares

Small Business Legal Issues - Choosing a Business Name

A U.S. Small Business Administration's article, 10 Steps to Start Your Business, touches on key legal issues that business start-ups face. These key issues are (1) Selecting a Business Structure; (2) Choosing a Business Name; (3) Registering your Business; (4) Obtaining federal and state tax identification numbers; and (5) Applying for Licenses and Permits. This blog post focuses on choosing a business name.

Choosing a business name is an important first step to forming your business. If you skip important research you may invest lots of resources in a name to which another person or entity has legal rights. In addition, there are state and federal laws that influence your business name options.

This blog post addresses the following issues:

  • State Entity Registration

  • Doing Business As ("DBA") Name

  • Trademark Law

  • Business Name Restrictions

State Entity Registration

For a business that decides it will form a legal entity, it must register the legal name of the entity in its state of incorporation and each state where it conducts business. The entity cannot choose a name that is identical or similar to a name that is already registered. Most states offer a database to search whether a prospective entity name is already registered.

Doing Business As ("DBA") Name

A Doing Business Business ("DBA") name is a fictitious, assumed or trade name that an individual or entity uses to conduct business. A DBA name is especially useful for sole proprietors and partnerships because it allows them to conduct business under the fictitious name rather than under a legal or an individual's name. Some formal business entities choose to use a DBA name if they operate under multiple business structures and want to maintain a uniform and consistent trade name. Alternatively, a formal entity may use multiple DBA names as part of a marketing strategy to differentiate between a variety of goods or services.

An individual or business that uses a "DBA" name must register it with the jurisdiction (city, county or state) in which it provides goods or services. It is important to note that filing for a DBA name with a local or state jurisdiction does not protect against creditors or legal liability. In addition, some states prohibit certain professionals from conducting business under a DBA name. For instance, many states prohibit attorneys from providing legal services under a fictitious or trade name. It is important to consult a business attorney to determine DBA name limitations, restrictions and requirements.

Trademark Law

State and federal trademark laws protect intellectual property, such as a name, phrase or logo. A trademark is any word, name, phrase, image or device used to sell or promote goods or services if it is intended to differentiate such goods or services. A business can trademark a word, phrase, logo, color, sound or smell to distinguish its good or services. It is important for a business owner to select a business name, phrase or logo that does not infringe on a registered trademark or a name, phrase or logo that is already in use. Doing so may confuse potential customers and expose the business to a trademark infringement lawsuit. A business attorney can assist a business to determine if another business is using the same or a confusingly similar name, phrase or logo. A business attorney can also assist a business to register a name, phrase or logo to protect its ownership rights.

Business Name Restrictions

Before selecting a business name, it is important to check federal and state laws that prohibit using legally or morally offensive terms. For example, state laws prohibit the use of curse words, profanity, words that promote illegal activity, or words that are deceptive to customers. For instance, Texas law prohibits using the word "lotto" or "lottery" in a business name.

These are a few legal issues to consider when choosing a business name. When considering a business name, you should consult with a business lawyer. Choosing not to consult an experienced attorney can result in significant missteps and exposure to legal liability.

Register Your Business Name!

Disclaimer: My firm provides business formation and related services for businesses across Texas, including Fort Worth, North Richland Hills, Euless, Bedford, Southlake, Arlington, Irving, Dallas, Plano, Houston, Austin, San Antonio, Corpus Christi, and Beaumont. This web site is designed for general information only. The information presented should not be construed to be formal legal advice nor to form an attorney-client relationship.

About Lisa D. Mares: Lisa D. Mares is an attorney at the Mares Law Firm, PLLC. She is a member of the Northeast Tarrant Chamber of Commerce. She loves sharing stories about the trials and triumphs of raising three daughters with her husband, as well as about her experience as a Camp Fire Fort Worth volunteer. Contact Lisa at info@mareslawfirm.com or learn more about her law firm at www.MaresLawFirm.com.

MLXLS​tay connected: @ldmares

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