Business Name

Business Name

Careful consideration should be made when choosing a Business Name for your company. Studies of mergers and acquisitions claim that as much as 70% of the value lies in the trade or brand names.

When forming a company the name of the company can be an important decision. Some people may choose the first name that they think of and others may select a ready made company for speed or because they like a particular name. However, many businesses may prefer to select a company name that either clearly distinguishes itself from its competitors or contains something unique or personal. Company names can be chosen for different reasons.

One of the most common ways of selecting a company name is to use something personal. A quick look through your local newspaper will probably introduce you to many personalised business names. Johnson Consulting Limited, T Smith and Son Limited, Stephens and Barley Limited are some fictional examples of what may be found. This may instantly make a company recognisable locally, it can be deemed as more personal by its customers, and often works well within geographical areas. However, it does little to tell new customers what your company does.

A popular choice for a small business is to choose a name that is ‘descriptive’. This tells prospective clients exactly what your company does. Examples of this may be to call your business The Window Company Limited, City IT Consultants Limited or The Advertising Agency Limited. Whilst this does serve to reinforce your primary business it offers little differentiation and may easily be adapted by competitors.

A less personal option is to use a company name that is ‘associative’. This type of company name helps to create an image or connection to your business activity. It is less direct than using a descriptive name but helps to position your company’s name within the market through peoples understanding of what words mean. For example a flick through the Yellow Pages will offer plenty of examples of this. A hairdresser called Classic Cuts or a printer called Selectaprint are examples of what may be found. These names offer some differentiation but may not ultimately set your company aside from its competitors.

An alternative is to choose a company name that is ‘freestanding’. These names are completely abstract and not related to the companies business activities. A fictional example may be to call your catering company Zedoc. There are many popular brand names that illustrate this point. Consider, Kodak, Cannon, or Pantene, these names will probably be instantly recognisable to you and conjure up a particular product or business. This is a good way of setting your company aside from the competition but it is important to consider the market that you operate in. Will your prospective clients know what your business is offering?

Choosing a company name may be a simple process, but it is not uncommon for people to deliberate over names for quite some time. Whilst company names can, and often are, changed during the life of the company most people like to choose a name that they like from the outset. Therefore consider your market, how much you want to differentiate from your competitors and what your company name should say about your organisation. Once the decision is made focus on the important business of making your company a success.

What Your Name Says About You

IBM and Apple work well as names that tell us nothing about their products and services, but both began life with identifiers in their names: International Business Machines and Apple Computer. Few companies are being started with names like New City Press or Walden Printing. What is more, it is not only new companies but also long-established printing firms, service bureaus and trade shops that are adopting names that rely on digital jargon. Words like printing, press, lithography, separator, engraving and type are replaced by high-tech-sounding terms.

Behind the naming frenzy lie a variety of intentions. Sometimes, companies seek to convey a progressive identity by using a high-tech name. When this is merely inflated rhetoric, the name does little to help the company. The name may even hurt the firm by creating mistrust among customers; misguided by the new name, the customers bring in work the company cannot do efficiently.

In some instances, important new capabilities are not conveyed by terms like press or separator. A name change may be required, but the existing name has lots of value associated with it. Abandoning it would be foolish. Trade names, like established brand names, carry valuable good will. Companies are careful about tampering with the name, the packaging and the contents of successful products. The issues are much the same when it comes to trade names. Studies of mergers and acquisitions claim that as much as 70 percent of the value lies in the trade or brand names.

The fundamental message is simple. As the technology continues to change, a company's previously most profitable processes may be less in demand. New capabilities originally acquired to support printing; the core production process and the primary revenue producer sometimes create unanticipated opportunities. This places a company making a transition in a quandary. How does it transform itself without abandoning what has been the heart of its business and what will remain its primary day-to-day focus for some years to come?

When setting up a business you must think carefully about what you want to call it. You cannot simply call your business any name that appeals to you as there are strict rules and regulations governing both the form and the use of certain words and phrases in business names.

You may be required to register your chosen business name with an official Government body, although this will depend on whether you operate as a sole trader, partnership or limited company.

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Your Businesses Name

Your business name is often the first point of contact between you and your customers, so it is crucial to choose the right one for your particular circumstances. Some customers may choose a business on the name alone so it is essential that your trading name reflects the quality and 'personality' of your venture. However, there are also legal requirements for choosing and registering the name and you must be careful not to breach these rules.

A good business name should:

  • Be easy to remember.

  • Be unique to your business (at least in the particular area where you do business).

  • Reflect your business' character.

  • Be easy for customers to find in directories and listings.

  • Include any relevant legal information (for example, limited companies must include the word 'Limited' at the end of the business name).

Business names should not:

  • Be complicated.

  • Be confusing.

  • Use slang or jargon that will date quickly.

  • Be obscure.

  • Use illegal or offensive words.

  • Use restricted or prohibited words (unless proper authority has been obtained).

It is no accident that many towns and cities have taxi firms named AAA Taxis, AB Cabs or similar. Such names are ideal because they are easily remembered, inform customers exactly what the service will provide, and appear at the top of directory listings.

If you trade as a limited company, you must register your business name with your relevant authority. If you are a sole trader or a partnership, you don't need to do this. However, even if you are exempt from registration, you are not free to choose any business name you wish.

Your business name must not:

  • Conflict with a registered trade mark.

  • Be offensive.

  • Constitute a criminal offence (see the section on restricted words).

  • Already be in use. You should check that your proposed business name does not conflict with other businesses in your area, registered trade marks or national organisations.

A business name is a title used by any sole trader, partnership or company, which differs from his or her own personal name, for the purposes of trading as a business entity. The local Business Names Act will set out the requirements regarding the use of business names, and the disclosure of requirements of certain details of ownership.

The purpose of the acts is to ensure that businesses cannot use names that mislead the public into believing that a business has a size or status that is not justified. It is also designed to ensure that potential customers and suppliers understand fully which business they are dealing with.

The Act will apply to your business if you are:

  • A sole trader using words in your business name that are not your normal surname (with or without initials). For example, if a person called James Brown is a furniture dealer trading as J Brown, he is not affected by the Act; but if he trades as J Brown Furniture, or JB's Furniture, then the Act does apply.

  • A partnership that does not use all the names of the partners in the business name.

  • A limited company trading under a name which is not its corporate name (for example, Bloggs Limited trading as Bloggs Burger Bar).

If your business falls into any of the above categories, you are required to comply with the Business Names Act's Disclosure Rules.

The Act will not apply to your business if you are:

  • A sole trader using only your own name (including a woman's married name).

  • A partnership using only the names of all the partners as a business name.

Business Name Act

If the Business Names Act applies to your venture, you must display the corporate name (or the name of each partner, or the individual owner's name) and an address where documents can be served, in the following ways:

  • The details must be shown on all business letters, orders, invoices, receipts and demands for debt.

  • The information must be displayed at all premises where business is carried out and where customers and suppliers are dealt with.

  • In both cases, the information presented must be clear, legible and prominent.

In addition, partnerships must include all the names of partners not included in the business name on all business stationery (unless there are more than 20 partners). Where there are more than 20 partners, the additional names need not be listed on the stationery; instead, details of the principal office, where a full list may be inspected, must be included.

Which words and phrases are restricted by law?

As well as prohibiting offensive words in business names the local Business Names Act will list certain words and phrases that are restricted, either because their use may mislead the public or their use by unauthorised persons or organisations may constitute a criminal offence.

Using restricted words and phrases (also called 'sensitive names') in a business name requires approval regardless of whether you are a sole trader, limited company or partnership. Using restricted words in a name without approval is a criminal offence.

The restrictions to prevent misleading the public include:

  • The word Limited (this must not be used unless the business is properly incorporated and registered).

  • Words suggesting national or international pre-eminence (for example, American, British, European or International).

  • Words that suggest a business has a specific size or status (for example, Society or Group).

  • Words suggesting pre-eminence or authoritative status in an area of business (for example, Institute or Board).

  • Words suggesting a specific objective or function (for example, Registered or Co-operative).

  • Words suggesting certain professions (such as architect, optician, chiropodist, vet or dentist).

  • Words suggesting certain organisations (such as Olympic).

  • Words suggesting a charity (such as Red Cross).

  • Words suggesting a connection with the Government or a local authority (such as Police, Health, Royal, School or Council).

  • Translations of any of the above.

If you want to use any of these restricted names, you will require approval from statutory bodies before you can use the name.

Misleading the public, or 'passing off'

'Passing off' is the term in civil law for misleading the public, even if unintentionally, into believing a business is actually another business. For example, selling motor cars under the name Roles Roice could be considered as 'passing off' and you may be sued by an injured party in a civil court.

Remember that registering your company is no guarantee against accusations of passing off.

In addition, if you are a limited company, any injured party may object to your use of a name by registering a complaint and if it is considered that your business name is misleading or unsuitable, you will be directed to abandon the name in favour of another. Likewise, if you discover someone is using a similar business name to your own, you should register your objection as soon as possible.

Similar complaints against sole traders and partnerships are dealt with by the civil courts and you should seek the advice of a solicitor.

Domain Names

Allocation of domain names is not currently policed by any Government agency. Each GTLD (Generic Top Level Domain, such as, .net, .com and so on) is subject to its own registration authority.

Several international and national bodies are responsible for managing records of domain name registrations.

Registration bodies include:

  • VeriSign - operates the .com and .net domains.

  • NeuLevel - operates the .biz domain.

  • Afilias - operates the .info domain.

These authorities will refuse to register a domain name if it:

  • Infringes an existing trade mark.

  • Is already in use.

  • Is likely to be used for unlawful purposes.

If you believe your business name has already been registered improperly as a domain name, you can make use of the relevant authority's dispute resolution service. Though the service has no legal powers, they will try to reach an agreement amenable to all parties.

A commercial solicitor should be able to advise you on the suitability of your proposed name.

Buying an off-the-shelf company name

There are professional brokers who offer limited company formation packages. They can provide an off-the-shelf company, complete with name and documentation, in less than 24 hours. They also offer a more bespoke service to allow you to create exactly the company you want. Most of these companies advertise online.

  • When choosing a name for your business, keep it simple; short names are most easily remembered.

  • It is always wise to consult a solicitor before deciding on a business name. To avoid any problems, check your proposed name against business names in local telephone directories, trade journals, directories of professional bodies and the Trade Marks Register

If you want to have a business website, you should also register your business name as a domain name. Even if you have no intention of setting up a website, you might want to stop competitors using your business name on the web. Consider all variants (such as .com, .org and .net) when registering your domain name.

.After you have completed the process of determining whether the desired corporate name is available for use in your state, another set of considerations also comes into play-trademark, tradename, and service mark considerations. Domain name issues are discussed separately below.

The permission for use of a corporate name by a Secretary of State is fairly narrow. It is only a finding that the name is not the same as, does not conflict with, and is not confusingly similar to any other corporate name registered in that state. Incorporating your company in whichever state you choose does not give trademark protection for your company name. The permission does not mean that you will necessarily have the legal right to use that name because Federal and state trademark laws may have granted prior rights in your chosen corporate name to a third party, which party may ultimately be able to prevent your corporation from using the name, even if the name is available according to your state's Secretary of State.

Good Product Names

Good product names act as advertising for your product. They differentiate you from your competitors and keep your customers coming back because they remember you and your product name. There is an art to naming products, and all great product names have the following qualities:

  • The words sound familiar even if it is a new word combination.

  • The word combination illustrates exactly what it product is.

  • The name shows how the product works/operates.

  • The name looks good on the page and on the product.

  • Words are easy to pronounce and sound pleasant.

  • The name grows on people over time.

  • The name is completely different from competitor names and is not confused with other products.

  • After hearing it once, people remember the exact name.

  • It appeals to the demographic of the product.

  • There is something unique, wacky, fun, humorous or original about the name.

  • There are no trademarks with the same name.

The first thing to do is to keep a list of names you love. Now next to each name write why you like the name. On another page write down competitor names and what you don't like about them. On the bottom of the page write how you could improve your competitors' names.

On a separate piece of paper, write down all the words that describe your product. Is there a saying or term that is similar to what you see? Are there any words that jump out to you from the page?

On another page write down what your product does and the needs it fulfills. Use the computer thesaurus to generate similar action verbs.

When you are in good mood and in nice relaxed place, like in a garden or someplace you like. The creative part of the brain works better when you are in a positive or meditative alpha state. When the right brain is an alpha state it ignites your imaginative and creative characteristics as well as your intuition out. In this state the ideas will flow like a river. The alpha state makes you more conductive to innovative thinking, and it creates new ideas rather than just processing old ones over and over again. Sometimes people get in the alpha state while hiking, driving, singing, swimming, dancing, or playing. Do what you love to get into a good state of mind.

Without editing write down all the names for your product that come to mind. Get really silly, see if there is a funnier way of saying what you want. How would a great comedian say it? What would an artist see? What would your crazy aunt call it? Give it an foreign accent. Say it like a teenager. Say it like a baby or little kid. Does it relate to movie name or a saying? What song would it be on the radio?

When you get a good name, it's like you hear a cash register ring. When you say it to other people their eyes light up with joy and comprehension. It like a hit song, you want to sing over and over again.

If you don't get any good reactions it will be time to get back to the writing board or hire a professional who thinks out side the dictionary.

When a Name is More Than a Name

Launching a new business is both an exciting and scary adventure for even a seasoned business veteran. But there is something about the spirit of the entrepreneur that drives us to strike out on our own and do something new, despite the risks.

You will have a lot to think about but if you get good help, you have a good shot at success. Of course you need financing, good accounting and legal help and a solid business plan. You need a product that serves a documented market need and a marketing plan that gets that product into the hands of that needy market efficiently and quickly so you can cash in on your business concept.

The legal side of things is probably the most intimidating aspect of a new business venture. Of the numerous issues that we need to be concerned out, one that often escapes notice is the simple act of choosing a business name.

This side of creating a new business is often the most exciting for the novice entrepreneur. By creating a name that is short but still does a good job of getting across the mission of the business is a challenge. But it is a labor of love for the owner or owners of the business to be. Often integrating the names of the owners or names of loved ones serves the business well. Certainly that can be said of McDonalds, Wendy’s and Denny’s.

But there are some legal issues to be considered when picking that name that is going to become your corporate identity to the world. That business name is going to show up on your business card, your web page, at your corporate headquarters, in your advertising if that is appropriate and many other places. It will be how the world references your business. You want to be proud of it for sure. But even more than that, it is important that name belongs to you.

The legal arena covering business names falls under the category of trademark law. The problem comes up if you happen to pick a business name that could possibly be the same name of a competitor in your field. This is not just a concern for your local community. If you are using the same name as someone on the other side of the country or even on the other side of the world, technically you can run into problems if that business decides to call you out about it.

Stories abound of how a big powerful company took issue with some small mom and pop business who happened to have the same name and used all of their mighty legal muscle to force someone to change their business name, maybe even abandoning their own family name because it was covered by the trademark claims of the larger firm. While these stories are sad to be sure, the fact remains, the law is the law. So it’s a good idea to make sure that this name you are about to create will be yours day one, in five years and even down the road when and if your business becomes a large international success.

So even though going through yet another legal process and employing yet another lawyer to run up yet another legal bill seems to be a burden, its necessary to make sure your business name belongs to you. The good thing is that trademark lawyers know their stuff and should be able to do a trademark search fairly easily to let you know if there is any reason for concern. Once you get that green light from your legal help, then you can proudly launch that name as your business knowing you covered your bases.

The Right Business Name - Key Terms Defined

Trademark. Any word, symbol, design, slogan, or combination that identifies and distinguishes goods.

Tradename. The name of a business or company, generally not protectible as a trademark unless used to identify and distinguish goods or services.

Service Mark. A mark used in the sale or advertising of services to identify and distinguish services performed for the benefit of others.

Distinction Between Trademark and Service Mark. The main difference between a trademark and a service mark is whether the mark is used with goods or services. Goods commonly have labels, and services have no place to attach a label. For most other legal purposes, trademarks and service marks are treated the same.

The most important right a trademark, tradename, or service mark owner possesses is the right to prevent others from trading on the owner's goodwill by confusing or deceiving third parties into purchasing a product or service through the use of a similar trademark or service mark. It is important to determine if anyone else has already trademarked the name you have selected for your corporation, particularly since you will also be selecting a domain name for your corporation.

Trademark ownership is based on who uses the mark first. Because of this, it is important to check unregistered as well as registered marks to avoid possible conflicts at a future date. Unregistered trademarks can be more difficult to find because of their very nature. A trademark that has not been registered with the state or federal government is a common law trademark. Common law trademarks are at a distinct disadvantage compared to federal or state registered trademarks.

The reason you are engaging in what seems to be an amazing amount of searches regarding the name for your corporation is that you are not only searching to determine whether the name is already in use by another corporation in your chosen state, but you are also searching to determine whether the name has been trademarked, either by common law or by federal trademark registration, which may prevent you from using your chosen name.

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