Naming your firm is one of the first steps in establishing your brand. You need one that attracts attention and clearly describes your product. It should be simple to remember while also being straightforward in pronunciation.
Nonetheless, it’s not sufficient to simply find a name. The naming of an LLC must comply with all applicable state statutes. After you’ve registered your LLC name, it’s time to start thinking about the financial aspects of your business and how they’ll be handled. You can learn your best-case scenario by consulting a professional tax accountant in Troy, MI.
We will explain the rules and guidelines for choosing an LLC name.
Does It Matter That the LLC Name and Business Name Are Different?
Assuming that an LLC is the same thing as a business name is a common blunder made by young entrepreneurs.
Your business’s brand identity will be associated with the business name, while the LLC name will serve as the company’s legal identity. This freedom means that the name of your LLC and the name of your firm can be different.
Catchy Cats LLC, for instance, may own both Cats Paws Supplies and Cat Au Lait, two separate businesses catering to cat lovers. Each company’s name reflects the goods or services it sells, but the LLC designation shows that the companies are owned by the same company.
It may be necessary to include both the entity name and the business name. When applying for some types of business financing or establishing a state business license, for instance, the LLC name will be required.
When forming an LLC, what rules and regulations must be followed?
Limited liability companies (LLCs) are governed by a variety of state laws. When forming an LLC, it’s important to keep in mind the following guidelines.
- The name can’t be used by another LLC in your state with the same initials.
- Must include some form of the phrase “limited liability company.”
- Cannot include any potentially offensive or banned terms
- The Internal Revenue Service prohibits the formation of limited liability companies for specific industries, including financial institutions and insurance firms. Some states prohibit the use of the words “insurance” and “bank” in LLC names altogether.
A list of prohibited activities can be found on the website of your state’s corporate regulatory agency. In much of the country, it is illegal to use:
- Rude expressions
- Comments that encourage wrongdoing
- Governmental-sounding words (like “federal,” “city,” and “township”) that aren’t actually affiliated with any government.
- Expressions like “medical” and “legal” if you’re not a medical professional or lawyer