Business Name Blues: Part 3, Make it legal

Business Name Blues is a 3-part series in which I talk about the experiences I had in naming my business and give tips based on lessons I’ve learned in the process. Part 1 explores choosing the business name. Part 2 looks into the online aspect of business naming. Part 3 closes with the legal and tax steps necessary to ensure your business name is protected. Also, as I go through each part, I will be updating the Resources page with a Business Naming section to assist you with resources and links to help you make the right moves when naming your business.

Don’t miss the end of this article where I summarize all I’ve learned with a list of 8 easy steps to naming your business!

Not Quite Done Yet

Come up with a good name for my business. Check!  Register my business website domain.  Check!  Time to start mailing fliers and knocking on doors right?  Not so fast!

If you’re serious about starting a real business, which I am, then you need to file your business name so it can be legally recognized as a legit business in order to use many of the benefits available to small business owners.  I had an interesting experience with filing my business name, the results of which required that I tweak the name a bit so that it complied with state regulations. I’ll explain more about that later on in the post.  First lets explore why it’s important to register your business.

There are numerous benefits to legally establishing your business:

  1. You can open a business checking account in the name of your company.  This will allow you to receive checks made out to your business name as opposed to your actual name.
  2. You can sign up for a merchant account.  This will allow you to accept credit card transactions.
  3. Ability to join local small business organizations.
  4. The first step to separating you from your business.
  5. You can get business liability insurance.  This is one of the most important things you’ll want to do to protect yourself and your business.
  6. You can get the added tax benefits afforded to businesses.  This is great if you’re business will take a while to be profitable.  There are many tax breaks and incentives for new small businesses.
  7. Your business name will be protected, at least within your state, so that no other businesses can use the same name that you are using.

So what were my experiences with this process?

My Story

After I established my domain name, www.jiffy-pc.com, I started reading articles online to find out what other steps I might need to take before I could really start doing business.  I knew I wanted a business bank account, a separate phone line, and possibly some sort of insurance for my business and I soon found out that before I could do these things, I’d need to file my business name as a DBA.

DBA stands for “Doing Business As”, and is necessary if you plan on running your business under a name other than your given name.  For example, I could run my business as Matt R’s Consulting and not need a DBA.  But how many people will want to hire some random Matt guy to fix their computer?  Given names work well for law firms and doctor’s offices, but for a computer consultation business, not so much.

I remembered hearing a radio commercial for LegalZoom.com.  In the commercial, the announcer mentioned that you can file your business paperwork through LegalZoom for less cost than hiring a lawyer to do it for you.  What I later found out was that it would have been simple to fill out the paperwork myself, but at the time I didn’t have that knowledge.  So I decided to check out LegalZoom.  It’s a very well laid-out site that was easy to navigate and use.  I filled out the step-by-step questionnaire and in less that 10 minutes I had ordered my DBA filing for Jiffy-PC.  I also ordered a business license package to ensure that I had all the proper licenses necessary to operate my business in my state.   Once that was done all I had to do was sit back and wait for the process to complete.

So I waited…

…and waited…

…and waited…

About two months later I get a letter in the mail from the Maryland Department of Taxation that says my business name was denied! What?!  After all the trouble of choosing the name and getting the website domains registered I find out that the name was denied!? Turns out the problem wasn’t that the name was already being used, but that it ended in PC.  According to the Maryland Department of Assessments and Taxation PC is an abbreviation that describes a business entity, like LLC, Inc, Corp, and it stands for Professional Corporation.  This is called an “entity ending”.  A business name cannot use an entity ending that doesn’t represent it’s business structure.  Since I was registering as a Sole Proprietorship, and not a Professional Corporation, I couldn’t end my business name with “PC”. This seems to be something that is unique to Maryland, and something that LegalZoom did not bother telling me.

I went into a panic!  This name I had worked so hard to choose was not valid?  What were my options?

Well, I initially tried to get in touch with the contact person at the trade name division ofmy state, but we ended up playing phone tag and I was never able to get her on the phone.  then I had to figure out what to do next on my own.  Since the problem was that the name ENDED in PC, I thought maybe I could get away with tagging something additional to the end of the business name. I decided to take a risk, without consulting with anybody, and modify the business name to: Jiffy-PC Computer Services. I could still use Jiffy-PC in advertisements and on my websites, but all official correspondence and tax documents would need the full business name.  No problem.  I wasn’t sure this would fly, but it was worth a shot.

It turns out this was a pretty easy task to accomplish.  LegalZoom was happy to accommodate this name change without any further charges.  I just submitted my new name to them and they did all the paperwork for me….again.  Granted, it took another month and a half for that to go through….but it did.  And afterward I received the letter in the mail that marked one of the proudest moments in my life…the official start of my first business.

What Did I Learn?

If you plan on using LegalZoom to register your business name, it helps to do a bit of research first. Log into the website of your local Small Business Administration and find out what department handles business name registration.  Read through all their naming rules to make sure you name doesn’t conflict with any of their rules.  This is the one step that I skipped and it ended up costing me a few months of time.

After all is said and done, I’ve put together a list of the order I would have done things in if I had to do it all over again.

8 Steps to Naming Your Business

  1. Make a list of possible business names - Make a list and ask friends and family to help you narrow it down to a few final choices.
  2. Search local and national business databases – Exclude any names from your list that are already being used. (Note: My business is based in the US so this only applies to US businesses.)
  3. Search the Web – Type the remaining business names into a search engine to see how they are being used online and make sure the domain name is available.
  4. Choose your business name – Now you should have enough information to settle on a good name.
  5. Register your business name with your local government – The department of government that handles business name registration varies from state to state.  Visit the website of your Secretary of State to get more information.  At this time, you will also need to decide what business structure you want to use.
  6. Register your business name with the US Trademark Office – if you plan on doing business outside your state.
  7. Register your domain name - Even if you don’t plan on having a website at first, you may decide you need one later on and it’s best to try to get the name registered ASAP.
  8. Congratulations! – You have a business name!

This concludes my Business Name Blues series.  I hope the information and anecdotes I have provided will help you make better informed decisions when naming your business.   If you have no plans on starting your own business, hopefully you now have a better appreciation for what goes into the seemingly simple task of business naming!

Updates to Resources Page under “Naming Your Business”:

  1. Organized section into three subsections: Getting Started, Registering Your Domain Name, and Making Your Business Legal.
  2. Linked to the US Trademark Office.
  3. Linked to a Secretary of State listing, from where you can find out how your state handles business name filings.

About Matthew Rodela

Matthew started YFNCG as a way to chronicle his journey in starting a computer business. It has grown to be a resource where any one can learn to start and grow a computer business. When he's not running his business, Matthew also loves playing music, traveling, and video gaming.

Read other articles by Matthew Rodela


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Comments

  1. Michael says

    Came here through TSD. I expect you will be successful, because you can write and your blog looks halfway decent. I’ve found it to be a good predictor of success.

  2. says

    Thank you for visiting Michael! I appreciate your vote of confidence, and we’ll see if writing a decent blog can translate into a successful computer business, I sure hope so!

  3. says

    Matt: good series. I’ve been down your road many, many times with all types of clients. We all know the blues part when a particularly attractive name is not available to us. We also know the elation when just the right name is available.

    But I’d like to comment particularly on your list of Naming Steps. I believe you left out the most important one of all – the one that prepares the foundation of your name as well as the other elements of your brand. It’s the strategic step that precedes, or should precede, building a list of name candidates.

    I believe strongly that a naming brief be created first, even if you’re a sole proprietor whose had this business boiling in his brain for the past 6-months. That document will be based upon the business plan, and will document the company mission, vision and values; the business model, the markets you plan to serve, the competitive climate including competitive branding examples, and most important, the attributes that differentiate your offering in a positive way.

    From that document should come the criteria for your name. I’m speaking of those characteristics above and beyond the genericl “keep it short” type admonitions. Should the name reflect a unique benefit? Should it convey a particular mood or tone? Should it work globally or locally only?

    The criteria will arise from the naming brief.

    Thus, I’d add two more steps prior to beginning the list building process: Preparing a naming brief and establishing you name criteria.

    I can’t emphasize enough how important these steps are, even for a one-person business.

    • says

      Hi Martin,

      Thanks for adding your valuable insights! I think a naming brief is a great idea, and will ensure you’ve made the smartest decision with your business name.

      Since I’m basing my naming steps on what “I” did to come up with my name, it’s certainly not an exhaustive list, and the addition of a naming brief and name criteria definitely sounds like a wise plan.

  4. says

    Best you could change the webpage name Business Name Blues: Part 3, Make it legal | Your Friendly Neighborhood Computer Guy to something more better for your webpage you create. I enjoyed the the writing withal.

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