Why is it so important to have a unique business name?

On Behalf of | Jan 18, 2018 | Business Formation

When you’re starting a new company, it’s important to take time to check all of the legal boxes, which includes registering your business name. The state wants to know what name you’re operating under, who owns the company and things of this nature.

It’s important to do this for more than just tax purposes. One thing that the state will check for is to make sure that no one else in the same industry already has that business name or one that is too close to it.

Now, you may feel like this problematic. You spent months or even years coming up with the right name, working on branding and getting everything ready to go. So what if someone else has the same name? Don’t you still want to use it?

You don’t. For one thing, you’re infringing on that company’s identity. They won’t be pleased if they think you’re doing it on purpose. There’s a reason you can’t start a computer company called Microsoft.

Plus, copying a company name is bad for business on your end. For young companies, a lot of business is just based on word-of-mouth advertising. If your company name is Tim’s Painting and there’s already a Tim’s Painting Company nearby, customers will get confused. Many of them will inadvertently get good reviews of your company and head straight for the already-established competition. You need to stand out and make a name for yourself.

Take your time when starting a company. Make sure you carefully consider all of the important legal steps and the ramifications of failing to do everything by the book.

Source: The Balance, “Why You Should Register Your Business Name With Your State,” Jean Murray, accessed Jan. 11, 2018