CHOICE OF NAME
The name selected for a new corporation should be distinctive, easy to use and not already identified by the public with another company or product. Additionally, it needs to comply with the statutory requirements of the corporation law of the state of formation, not already be in use as a corporate name in the jurisdiction of incorporation or in other jurisdictions where the corporation will do business, and, if the name will be used in marketing the corporation’s products or services, be protectible under trademark law. CORPORATE REQUIREMENTS When selecting a corporate name, it is necessary to check the corporate statutes of the proposed state of incorporation for any special provisions relating to corporate names. Corporate law requirements will vary from state to state. DELAWARE In Delaware, the corporate name must contain one of the words “association,” “company,” “corporation,” “club,” “foundation,” “fund,” “incorporated,” “institute,” “society,” “union,” “syndicate,” or “limited,” (or abbreviations thereof, with or without punctuation), or words (or abbreviations thereof, with or without punctuation) of like import of foreign countries or jurisdictions (provided they are written in roman characters or letters); provided, however, that the Division of Corporations in the Department of State may waive such requirement (unless it determines that such name is, or might otherwise appear to be, that of a natural person) if such corporation executes, acknowledges and files with the Secretary of State a certificate stating that its total assets are not less than $10,000,000. Additionally the name shall not contain the word “bank,” or any variation thereof, except for the name of a bank reporting to and under the supervision of the State Bank Commissioner or a subsidiary of a bank or savings association (as those terms are defined in the Federal Deposit Insurance Act, as amended, at 12 U.S.C. §1813), or a corporation regulated under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. §1841 et seq., or the Home Owners’ Loan Act, as amended, 12 U.S.C. §1461 et seq., provided, however, that this prohibition does not prevent the use of the work “bank,” or any variation thereof, in a context clearly not purporting to refer to a banking business or otherwise likely to mislead the public about the nature of the business of the corporation or to lead to a pattern and practice of abuse that might cause harm to the interests of the public or the State as determined by the Division of Corporations in the Department of State. NAME AVAILABILITY The Secretary of State or similar officer of virtually all states maintains a consolidated list of the following: (i) names of all corporations, limited partnerships and limited liability companies and (in some jurisdictions) partnerships (“Covered Entities”) in good standing, (ii) names of all Covered Entities qualified to transact intrastate business and in good standing in the state, (iii) corporate names already reserved, (iv) sometimes names of nonqualified Covered Entities registered under a state trademark registry, and (v) names that will become record names of domestic or qualified foreign corporations at some delayed effective date of a filed corporate or partnership or limited liability company instrument, such as a merger agreement. The Secretary of State will not accept articles of incorporation for filing if the stated corporate name resembles closely, is confusingly similar to, or is the same as any name on the consolidated list. Note that the Secretary of State
frequently considers the words “corporation”, “incorporated” and “inc.” to be one and the same word for purposes of availability. A further consideration in selecting a corporate name is whether that name is broadly available for use in other states where the corporation will be conducting business. A corporation must qualify to do business in any state in which it does business. In each of those states, it is necessary to check name availability. If a name is not available, state laws generally provide for the use of an “assumed” name in a foreign state. PRE-CLEARANCE OF CORPORATE NAMES Proposed corporate names for new corporations, as well as newly qualifying foreign (out-of-state) corporations and corporations of record preparing to change their name, should be precleared through the name availability section of the Secretary of State’s office of the appropriate state prior to the submittal of documents for filing. The preclearance and/or reservation of a corporate name is necessary to avoid the rejection of documents submitted to the Secretary of State for filing because of a name conflict. DELAWARE If you are incorporating in Delaware, a preliminary check of the name availability may be obtained by calling the Secretary of State’s office (302-739-3133). You may then proceed in reserving the name through the filing service as noted above. In Delaware names are reserved for a period of 30 days. TRADEMARK PROTECTION You should also give consideration at the outset to trademark and trade name issues. Trademark protection is not available for a name solely used as a corporate name. The corollary of this is that name availability determined through the name check process with the various Secretary of State offices does not guarantee that the name is available for use as a trademark in connection with goods or services, and securing a name through filing of incorporation documents and qualifying to do business does not confer trademark rights. Accordingly, if you intend to use some variation of the corporate name as a trademark or service mark in your business, you should obtain trademark searches to determine if there are conflicting or similar trademarks or names in use.
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