Do I have to use LLC in the business name?

Once you've decided to start up your new company as an LLC, or limited liability company, selecting the right name for your new business is probably next on your to-do list.

Before you can register an LLC, however, you need to know what you will be calling your new company. Unfortunately, choosing an LLC name is not as simple as choosing a name you like. There are a number of legal requirements you need to be aware of. 

Naming an LLC is not something to be taken lightly; your LLC name not only identifies your business, it can also be an invaluable marketing tool. So it makes sense to take some time to find the best name for your company.

While LLC company names can be changed, having to make such a change at some future date will require additional work and effort on your part—and if you've been in business for a while under your existing LLC name, you may run the risk of losing any brand recognition you might have built up under the old name.

Start with a list of names

The best way to begin the important job of selecting an appropriate name for your new start up is to put together a list of potential LLC names that would be suitable for your company. 

Having a list of names to draw on means you can run through the necessary business name searches all in one go, and if a few of the names on your list turn out to be problematic, you'll still have the others to turn to.

Business name search

When you file the formal document necessary to register your LLC (usually known as "Articles of Organization"), you want to be certain you're using a business name for your LLC that's actually available for you to use. 

Most states will not permit you to use a name that is identical to the name of another business that's already registered within your state, or a name that's too similar to such a name.

Check with your state about conducting a business name search. In many states, you'll be able to search an online database of currently registered business names. Check each name on your list of potential LLC names to see which ones are still available for you to use.

A trademark name search is another search you should add to your to-do list. By searching the US Patent and Trademark Office’s trademark database you can check to see if any of the names on your list are identical to, or too similar to, a name that's already in the database. Doing so could save you some future headaches, as it helps you to avoid using someone else's trademark as your business name.

The legal requirements

The laws which apply to LLC names vary from state to state, but in general most states will require you to include certain required words as part of your name. Additionally, there will be a list of restricted words which you will not be permitted to use in your LLC name.

Identifying your company as an LLC 

Most states require an LLC designation be included in the name of a company that's registered as an LLC. The designations vary from state to state, but generally include phrases or abbreviations such as "Limited Liability Company," "Limited Liability Co." "LLC," and "Limited."

Restricted words

Each state will also have a list of restricted words that cannot be used as part of an LLC name. Commonly restricted words include "bank" and "insurance".

One reason these words are restricted is because their use in an LLC name could be misleading for the general public.

If you feel you absolutely must use one of these restricted words in your LLC name, check your state's business name guidelines to see if there's a process through which you can apply for permission to use the restricted word as part of your business name.

Fictitious business name/doing business as

What if you don't want to use "LLC" or any other LLC designation in your business name?

Unfortunately, if your state requires that such a designation be included in your registered LLC name, you will have to comply with these requirements. However, if you really don't want to include "LLC" in your business name, once you've registered your LLC you can also opt to register a DBA ("doing business as").

A DBA is also known as a fictitious business name or a trade name. Sole proprietors and partnerships register a DBA when they want to run a business under a name other than their legal names. 

Advantages of LLC in a business name

Using the "LLC" or other LLC designation in your business name does have a number of advantages.

Having an LLC in your name tells potential customers and clients that you've taken that extra step of registering an LLC. This can help to make your business look more reputable or legitimate, which can be an important consideration especially when your business is just starting out.

Additionally, the LLC in a business name alerts people to the fact that your company is a separate legal entity. When they're dealing with the business, legally they're dealing with that entity and not with you personally.

These can be big advantages that may outweigh your desire to have a business name that does not include an LLC designation.