Law News and Tips
“A Rose By Any Other Name …”
After falling in love with Romeo at a ball, Juliet is sent to her room. From her balcony, she privately (for all of us to hear, of course) declares her love for Romeo, but there’s a problem. He’s from a family that her family hates. There’s a feud going on like the Hatfields and McCoys.
But Juliet (being young and naïve) looks past the name to the person. She says, “What’s in a name? A rose by any other name would smell as sweet!”
I would not hire Juliet is a business consultant. For a business, a name is HUGE! It contains most, if not all, of your goodwill that you spent years building up. A name change can confuse customers and be disastrous.
Even so, I am often surprised by business owners who have not taken the time to protect their business names. It’s not that uncommon for a company to be organized under one name, but to be doing business under an entirely different name. Why? I don’t know. The owner just files the fictitious name registration and operates under a D/B/A designation.
The problem is that a fictitious name registration does not protect your business name. I had a client buying a business that for some reason, operated under 5 or 6 different fictitious names. As a part of the due diligence, we checked to make sure the registrations were valid. We found that one of the names had been taken by a woman in California who had created a Missouri LLC using that name. My client had to give that name up.
The only thing that a fictitious name registration does is it puts the public on notice about who is behind a name if someone decides they want to sue you. It is a consumer protection statute, not a business protection statute.
So how do you protect the name of your business? The simplest way is by forming a corporation or an LLC. The law protects the formal names of business entities.
However, we live in a very mobile society, and the company may engage in business in several states. A company engaged in business in other states may have to register as a “foreign” entity. That’s a pain, but it does protect a company’s name where the company is registered. That doesn’t help in any other states where the company isn’t registered.
It may be that it’s just not the company’s name that is important. It may be the colors (think of McDonald’s golden arches) or the style of the name. In those situations, it might be important to register the name or symbol as a trademark.
When people think of trademarks, they usually think of federal trademarks registered with the US Patent Office. But a business can register just in its home state. However, that will only protect the mark in that state.
It’s more expensive and harder to get, but the federal registration does afford the broadest protection. A federal registration protects the business name and/or Mark in any state where you are conducting business. FYI: if you’re not conducting business in another state or region, the name is not protected there.
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