THE BASICS OF A CORPORATE NAME RESERVATION

May 17, 2024

Welcome to our blog and news page. You will find articles, informational notices, and a video here. Still looking for some help? Contact us and tell us what you need!

Categories

THE BASICS OF CORPORATE NAME RESERVATIONS

Becoming an entrepreneur is an exciting and momentous time in someone’s career, but producing a name that suits your business can be extremely challenging. After conjuring up a few name ideas and doing a quick search with the Secretary of State for availability, is the race on to get your business formed so nobody else steals the name you worked so hard to decide on?

This is where a name reservation comes in. It buys you time to organize your business affairs and branding while saving the business name of your choice!

WHAT IS THE DIFFERENCE BETWEEN NAME AVAILABILITY AND NAME RESERVATION?

Ensuring the availability of your business name is a critical first step in establishing your business. Selecting a name available in your jurisdiction and as a domain name for your online presence is essential.

The state conducts a name availability search to confirm there are no conflicts with existing entities and that your chosen name is unique. Each state’s process is different, and some can be checked quickly online or by contacting the team at Corp1 to perform the search for you. Name availability discloses that the name is available on that day and time and does not reserve the name for future use.

Additionally, keep in mind that some words and terms require clearance from other state departments, such as education and banking. Your team at Corp1 will assist you with the process. 

WHAT IS A CORPORATE NAME RESERVATION?

A name reservation secures your entity’s name through a reservation filing, payment, or both in a specific state to prevent others from using it. This ensures that your chosen name is available when you register your business in that state. It is a preemptive measure to avoid conflicts and maintain consistency as your business expands into new territories.

WHY MIGHT I NEED A NAME RESERVATION?

A name reservation may be needed in different states for several reasons:

  • Expansion: If your company is growing and you plan to operate in multiple states, reserving your name ensures uniformity across jurisdictions.
  • Relocation: If your business is relocating and needs to re-domesticate in a new state, reserving your name can give you the time to finalize the move.
  • Strategic Planning: If you have a name in mind for your business but are not ready to file yet, reserving it secures your choice for later.

HOW MUCH DOES A NAME RESERVATION COST?

The cost and duration of a name reservation period will vary by state. Most states require fees between $10 and $35, with a few outliers at $50 to $100. Typically, the reservation lasts for 30-120 days. Some states will allow extensions for an additional fee, and the extension usually mirrors the initial duration and cost. You can check the Secretary of State’s website for specifics on state-name reservation requirements or consult with Corp1.

Name reservation services

QUICK TIP: Alabama is the only state where name reservations are required before forming or registering your business and remains valid for up to one year from the initial reservation date.

HOW DO I FILE A NAME RESERVATION?

To effectively reserve your entity name:

  • Research: Understand the duration and costs associated with name reservation in the state(s) where you plan to operate.
  • Act Promptly: Once you have decided on a name, reserve it! This is especially important if it is critical to your branding and identity.
  • Consider Extensions: If your business plans are still in flux or you anticipate delays, consider states offering extension options to keep your name secure.
  • Legal Advice: If unsure about the process or legal implications of not obtaining a name reservation, consult your legal counsel.

WHAT IF THE BUSINESS NAME I WANT IS ALREADY TAKEN?

You settle on a business name, start contracts with legal counsel, and apply for an Employer Identification Number only to discover that the name is unavailable in your primary state. Or you registered your business name in your home state and found it is unavailable in the state(s) you are expanding to. Other options are available!

  • Seek Name Consent: In some states, business owners can seek consent from the entity already holding the name to form under a similar name – one that the Secretary of State would otherwise reject. However, the business entity already holding the name is not obligated to grant consent.
  • File an Assumed Name on Your Formation Document: If you obtained your desired business name in your home state and are expanding to a state where the name is unavailable on the Secretary of State’s records, there’s still hope! You can still register your business name as the “true” name and, on the Application for Authority, enter an assumed name to be used just in that state.
  • File a DBA: In your home state, another option is to file under your next best – or more general product or service – name and “Doing Business As” (DBA). The DBA filing would reflect the name you originally wanted, though the name on the Secretary of State formation document will still be the legal name. An example would be if you want your company to be called Kelly’s Cookies LLC, but there is already an entity with that name. If available, the business owner could register “Kelly’s Kitchen Confectionaries LLC” and register a DBA for Kelly’s Cookies.A DBA registration will be separate from your Secretary of State formation filing and will either be filed with the state, the county your business resides in, or both. A DBA is one of many terms used for the same purpose, including (most commonly) fictitious names or trade names.

HOW LONG IS A NAME RESERVATION GOOD FOR?

The duration depends on the state; for example, in New York, filing an Application for Reservation of a Name reserves a name for 60 days. The average period is 120 days; some states offer a renewal for an additional fee.

WE’RE HERE TO HELP.

Corp1 is not just a service company; we care about your experience and strive to provide the expertise you need when you need it. Contact us anytime; we are here to help.