When planning to launch a new business, reserving and establishing your start-up’s name is your topmost priority because your business name is your brand identity and will be used more often when your business expands.
A business name isn’t just a name for the audience to remember your business by but a unique identification name that has to be mentioned on all your legal business documents, your tax filings, and in state and central government records.
So, a business name is something that should be thought about and discussed thoroughly to make it as unique as possible so that your audience can distinguish you from other businesses in the market.
Hence, one must give serious thought to choosing a brand name and making it impossible for any other business to use the same firm name.
Choosing a brand name isn’t a cakewalk and requires a lot of thought and relevance to be put into it. Your business’s name will be displayed on all your products, your marketing campaigns, your social media handles, and much more.
Considering the huge importance of a business name, it isn’t surprising to know that many times businesses choose to reserve a business name for their company even before starting their company.
Going through the above paragraph, one might think reserving a business name is an absolutely sane and safe option but they fail to recognize that reserving a business name isn’t always the best choice.
Let us take you through the complete guide on how and when to reserve your business name. Firstly, let us know more about the types of business names present for us to choose from.
Choosing a business name
Fundamentally, all countries have established their own rules on how to name a business and different types to do it. In most cases, people file their business names as DBA which is doing business as registration.DBA means that the business owner is naming the business anything except their own name.
Under DBA registration, the business owner doesn’t necessarily have to register his own name until and unless his company name includes his personal name. As far as bank account formalities are concerned, if you wish to open a business account, you have to file for a DBA and then go forward with opening the account.
At this stage, new business owners should also preferably proceed with trademarking their business name so that nobody else in their state can operate with the same company name. Additionally, registering for a domain name for your website is also a crucial task at this stage so that your website name isn’t stolen or copied.
Search if your business name is available for use
Choosing a business name is not that complicated a task but choosing a unique business name that hasn’t been used before is a difficult task. The state won’t allow you to choose a business name that has already been trademarked by another company bef0re. So it is advised to check the name’s availability before finalizing it.
Now, one might wonder how can they confirm if that business name is available or not, so that, mostly there are online databases available for you to check if your preferred name is available or not. If the name you have chosen is identical or almost identical to any other business’s name then you have to look for another name for your company.
Benefits of business name reservation
First and foremost, reserving a business name in advance helps business owners to focus more on other business details in the latter stages. Deciding on a company name is challenging and time-consuming at the same time so deciding on a name prior to launch works well for many businesses.
Also, reserving a name is one step forward toward safeguarding your firm’s name from being replicated.No other business can function under your business name as soon as the reservation period is going on. The reservation period approximately is of 120 days but can also last up to one year in some places.
All in all, having the right name for your company isn’t a piece of cake and once someone finds a perfect name that is available for use, they should decide on reserving it.
Disadvantages of business name reservation
Name reservations come with their own baggage of cons and one cannot afford to ignore them. First and foremost, reserving a business name isn’t a lifelong plan and eventually expires giving way to other companies to use that name without any repercussions.
In many cases, name reservation turns out to be an added non-refundable expense that isn’t a sane choice for most businesses still in their former stage. The money it is needed to reserve a business name is often high and is not being used towards business formation but is being used to safeguard your business name just for some time.
In most cases, reserving a business name in one state does not guarantee name reservation in another state and that poses a problem for big corporations who have or want to expand to different geographies. Most big firms require their brand image to be consistent throughout different locations and name reservation becomes a task in that case.
The cost of name reservations varies from state to state but is not value for money in most cases, but if you are really eager to reserve your unique company name and can afford an added expense then you should go forward with it.
It is also suggested to incorporate your company and then go for directly registering your business name and avoid reservation expenses. We will advise you to contact Northwest registered agent to register your business.
When is the right time to reserve a name for your business?
There is no set right time to reserve a business name, you can reserve your business name as soon as you decide on the perfect name for your company. In a situation where you are sure about your business name but still figuring out your business model you should go for a name reservation.
If your business is gradually moving towards incorporation so you can undoubtedly apply for a name reservation to safeguard the name yourself in your state.
Business name reservations last for an average period of 120 days but vary according to different locations. So, the name reservation feature basically buys businesses time to work on other key components of their business and do not worry about the name at the latter stages of business development.
This dodges any type of risk business owners might face regarding their name, imagine deciding on a perfect name and not reserving it and that name being taken by another firm, that would be hard to manage and hence reservation can be considered.
Lastly, some places need businesses to pre-reserve their business names necessarily without failing. States like Alabama want every business name to be reserved before being registered as a proper business in the state.
Procedure to reserve a business name
Reserving a business name is not a very complicated procedure and can be easily achieved once your decided business name is available for use in that state. Reserving a name establishes your intent to form a business and this is also the right choice if your business incorporation might take time but you are sure about your name.
We cannot provide you with a constant price for reserving your business name because prices differ at different locations. Websites like Godaddy, and Namebright can help you with the domain name.
Reservation is in a way a step toward a business name registration and promotes a hassle-free name registration in the future. One might approach the state authorities to move forward with their company’s name reservation.
When should one avoid reserving a business name?
One of the most obvious reasons for not reserving a business name is when your business is ready for launch and can be incorporated immediately. At this stage, it is better to skip the name reservation step and directly register your business as well as your business’s name.
The second most sane reason to not opt for a name reservation is when you don’t have a clear estimate of when you’ll be launching your business and you aren’t sure about your business idea yet. Make sure you are in a stage where your business will kick start soon if you apply for a business anime reservation.
Next up, if it’s a case of sole proprietorship and your business doesn’t have to be registered then too one can reserve a business name but it doesn’t hold much significance.
Registering your Business Name
Reserving and registering are two very varied terms and cannot be used interchangeably. While reserving a business name is a temporary option, registering your business name by registered agents is totally permanent.
In certain cases of a sole proprietorship, business registration is not necessarily needed but is still recommended to protect your company name’s uniqueness.
It’s possible that you can reserve your name, only to find out that you can’t register it because it doesn’t meet the rules. Do a little additional research first to be sure.
