Business Legal Tips

Business Legal Tips

Choosing a Business Name for your Massachusetts Business

Mark Bross January 1, 2018

Starting a Massachusetts business?  Not sure what name to choose?  Here are some helpful tips about what to consider when choosing a business name!

CATEGORIES OF BUSINESS NAMES

It is important to distinguish between 3 types of business names that can be associated with your Massachusetts business:

      • Legal Name:   The official name of the corporation, limited liability company or other artificial legal entity that is created for your business.  The legal name distinguishes your legal entity from all other entities.   Every artificial legal entity lawfully operating in Massachusetts is registered with the Secretary of the Commonwealth (“Secretary”) and has an official legal name.  However, any business that is not a legal entity, such as a sole proprietor or association, does not have a legal name and does  register with the Secretary.
      • Trade name: The name used by a business to provide its goods and services to customers.  Every business — even a sole proprietor — has a trade name!  Some businesses use the same legal name and trade name.  But  many business choose a short version of their legal name or a different name as a trade name.  For example, Uber is the trade name for the popular ride-sharing service, but Uber Technologies, Inc. is the actual legal name.  Obviously, Uber is easier to remember! A trade name is sometimes called the  “doing business as” or the “D/B/A” name of the business.
      • Domain Name:  The human readable name of the website for your business.  For example, the domain name for the company Apple is: Apple.com.  It is the name that customers will type into web browsers after the www. to access your website online.

Each type of name has a different purpose and is governed by different laws and rules about acceptable and available names.  There is no guarantee that a name is available and acceptable for all purposes.  When choosing a business name, consider all potentially relevant laws and rules to make sure the name is not already in use. Otherwise you business could find itself in legal hot-water!

LEGAL NAMES

If you choose to operate your business as an artificial legal entity in Massachusetts, an acceptable legal name is governed by laws and regulations specific to each artificial entity:

Type of Legal Entity Relevant Statutes and Regulations
Corporation M.G. L.  c. 156D, § 4.01

950 C.M.R §§ 113.16(3); 113.18

Limited Liability Company (“LLC”) M.G.L. c. 156C

950 C.M.R. § 112.12(1)

Limited Partnership (“LP”) M.G.L. c. 109 § 2(1)

950 C.M.R. § 108(12)

Limited Liability Partnership (“LLP”) M.G.L. c. 108A § 46

950 C.M.R. § 111.06

These statutes and regulations are all similar and require certain words that identify your specific type of legal entity for your legal name.  They also prohibit the use of a legal name that is the same or deceptively similar to other legal entities.   A corporation’s legal name, for example, must include words like  “Incorporated,” “ Corporation,” “ Company,” or abbreviations of the foregoing.   A corporation is also prohibited from adopting a legal name that is the same or deceptively similar to the following:

      • The corporate legal name or trade name of a corporation (including not-for-profit corporations) organized, authorized to transact business, or otherwise lawfully conducting business in Massachusetts;
      • A corporate legal name under reservation;
      • The legal name or trade name of a partnership or other artificial legal entity organized, authorized to transact business, or otherwise lawfully conducting business in Massachusetts;
      • A trademark or service mark registered with the Secretary, unless the owner consents in writing.

LLC’s, LP’s, and LLP’s have similar required and prohibited elements for their legal names, with appropriate differences for the specific legal entity in question.

Choosing a Legal Name

When choosing a legal name, many startup businesses are unsure about where to start looking for available legal names in Massachusetts.  The best place to start looking is in 3 publicly available databases (“Secretary’s Databases”) on the Secretary’s Corporate Division website,  https://www.sec.state.ma.us/cor/:

      • The Corporate Database. This database includes all Massachusetts and foreign corporations and artificial legal entities (LP’s, LLC’s, LLP’s, and others) that have registered to do business in Massachusetts.
      • The Corporate Name Reservation Database. This database includes  a list of all legal names that are reserved as well as the individual who has requested the reservation.
      • The Trademark Database. This database includes all of the trademarks and service marks registered with the Secretary in Massachusetts.  It does not include federal trademarks or service marks registered with the U.S. Patent and Trademark Office (“USPTO”).

These databases are fairly easy to search.  Make sure that you try different variants of the name under consideration to see if there is any conflict.  Keep in mind that the Secretary does not purge names that are no longer in use, so many of the names in these databases are for expired trademarks or dissolved legal entities that are no longer in business.  Check the information associated with any conflicting entity or trademark to see if the mark is expired or the entity is dissolved and no longer in business.  Consult with an attorney with experience in setting up legal entities if you are unsure.

If your proposed legal name is available and there is no direct conflict, the legal name can likely be registered in Massachusetts and the artificial legal entity created for you business.  The Secretary has taken the position that he is not responsible for determining the overall general legal acceptability of a legal name, but will only search his records and databases for direct conflicts.  So if your proposed name does not directly conflict with a name or mark on any of the publicly available databases, it can likely be registered in Massachusetts.

Be advised, however, that the Secretary’s Databases only track legal names and trademarks registered in Massachusetts.  None of the Secretary’s Databases track all trade names at use in Massachusetts, federal trademarks, or legal names and trade names used in other states. So, if the Secretary’s  Databases are the only place you look, there is still a risk that another business is already using a similar name.

TRADE NAMES

Finding and choosing an appropriate trade name is a little more complicated. It will require some work and creativity to determine the best trade name for your business and whether the trade name is available.  There are several complicating factors:

1.  Town and City Registrations.

The use of trade names for any business operating in Massachusetts is governed by  M.G.L. c. 110 § 4-6 (the “Business Names and Labels Statute”).  Under this statute, any person or legal entity conducting business in Massachusetts under any title other than his, her or its own real name must file a Business Certificate in every city and town where an office is located. Unfortunately, this means that there is no statewide database which can be searched to tell you what trade names are actually at use in the state.  Instead, you need to contact each town or municipality in Massachusetts to determine whether a business has filed a Business Certificate for the trade name that you want to use!

2.   Legal Entity Exceptions.

Under M.G.L. c. 110 § 4-6 the following artificial legal entities do not have to file a business certificate:

      • Any Corporation, LLC, or LLP doing business under its true legal name;
      • A partnership doing business under any title which includes the true surname of any partner; or
      • Any limited partnership doing business under its name which contains (without abbreviation)  the words “ limited partnership.”

These exclusions mean that the Secretary’s Corporate Database needs to be searched to find out if any legal entity has a legal name that is similar to the trade name under consideration.  When searching names in these databases for trade name usage, conduct a variety of searches that use different variants of the trade name you are considering. To be on the safe side, assume that most businesses have trade names that are truncated versions of their legal names.  For example, if you come across the name XYZ, Inc. (and it is still in business) assume that XYZ by itself is a trade name of the business.  This may not be true, but it’s safer to assume in order to avoid a potential legal issue in the future.  However, if you are truly committed to the name XYZ and want it for your trade-name, investigate further to see whether XYZ is being used by itself.  It might be worthwhile at this stage to contact a knowledgeable intellectual property attorney to help  determine the best way to proceed.

3.  State and Federal Trademarks.

A trade name can also be registered as a state or federal trademark (or service mark) of a business.  If registered as a trademark in Massachusetts, the mark will be on the Secretary’s Trademark Database described above and this database should be searched before using your proposed trade name.

If registered as a federal trademark (or service mark), it will be registered with the United States Patent and Trademark Office (USPTO).  The USPTO also has a searchable trademark database, called the Trademark Electronic Search System (“TESS”).   TESS must also be searched before using a trade name to make sure that there are no conflicting federally registered trade or service marks in your industry. I have heard many stories about businesses forced to abandon their trade name after receiving a cease and desist letter from a federally registered trademark holder.  Don’t let this happen to your business!

You can search TESS on your own, but running a complete search and interpreting the results can be tricky.   It is best done by a knowledgeable intellectual property attorney and it would be worthwhile to invest some money here before investing your time and money on building the reputation of a trade name that may have to be abandoned.  If the trade name is available, it may also be prudent to seek to register the trademark (or service mark) before anyone else starts using it.

If your proposed trade name is on the Secretary’s Trademark Database or TESS, be careful before choosing and using this trade name.  The safest course of action may be to choose another trade name.  But if you’re committed to using this trade name,  consult with a knowledgeable intellectual property attorney to discuss your options.  It’s possible that your use would not infringe the registered trademark, that the registered trademark has expired, or that some kind of agreement can be worked out with the registered trademark owner.

DOMAIN NAMES

Often, a critical factor in deciding on a business name is whether the name is available as a domain name for your website.  For example, if you were starting an online Massachusetts business selling rugs with the trade name “Exceptional Massachusetts Rugs”, the availability of this domain name for purchase would be essential!

To  search and purchase a domain name, you need to use a domain name registrar. Domain name registrars are companies that have been accredited by ICANN (Internet Corporation for Assigned Names and Numbers), the non-profit that manages the domain name system, to manage the domain names behind websites.

There are hundreds of domain name registrars that can be used.  Most domain name registrars make it easy to search for and purchase available domain names.  However, there are many different features to consider, such as pricing, customer support, ability to transfer the domain, ability to renew the domain, and other factors.  Talk to multiple business owners about what domain name registrar the used for their website and whether they had any issues.  Also, consult online reviews to find out what domain name registrars are reputable and best suit your needs.

Research potential domain names as soon as possible so that you can figure out what trade names are available as domain names and which ones are not.  For some businesses the unavailability of a domain name is a devastating blow and may result in a different trade name for the business.

If you need help choosing a name, setting up a legal entity, or with any potential trademark issues discussed in this post, please contact my office.  Use the contact form on my website or call me to schedule a free initial consultation.