About Business Names

Chapter 4: Starting a Business - Page 4.3

Owning and Establishing a Business Name (Continued)

The second common level of business names is called DBA (for "doing business as") or Fictitious Business Name, which gives an individual the right to operate under a business name with signs, bank accounts, checks, and so on. These are generally registered and legalized by county governments within states. There might be a McDonald's Hardware Store as a DBA in many counties within a given state, and across many different states.
To register a business with a fictitious business name, call your county government for details. You can expect that you'll have to visit an office in the county government, pay a fee of less than $100, and do some legal advertising, also less than $100, probably using forms you can fill out in the same office.
Somebody will probably look up the registry to make sure that yours is the first business in the county with that name. Details will vary depending on which state and county you're in.
The third level is the corporation, regardless of its various corporate entities. Whether they are S Corporations, C Corporations, LLCs, or whatever, a corporation is registered at the state level and only one can have the same name in the same state. However, there is no guarantee that there won't be many businesses registered as McDonald's Hardware Store in several counties in a state, and a corporation registered as McDonald's Hardware Corporation. This kind of duplication happens.
To establish a corporation, you can use some of the national services such as the Company Corporation or a local attorney. The corporate forms will go to the state, and details will depend on which state you're in.

Even though duplicate business names are possible and quite common, you do still have the right to protect and defend your own business name once you've built the business around it. The key to this is the real or perceived confusion in the mind of the customer. As we said above, one John Smith can sue another John Smith for purposely confusing their identities. So too, McDonald's Hamburgers can and should sue anybody who starts a new restaurant named McDonald's serving any fast foods.

On this point, when one business is confused with another, being first matters. When somebody tries to establish a second McDonald's Hardware where it would confuse people with the first, then the first McDonald's has a legal right to prevent it. If the second store puts up a sign, then the first store should take quick legal action to stop it. The longer the first store ignores the second, the better the case of the second store.

When the whole mess goes to court, the first one to use the name is likely to win, but if the first one sat quietly while the other one built the name, then there is more doubt. An existing business should always watch out for people using the same or confusingly similar names, because the sooner it complains, the better for its legal arguments.

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