Registering your freelance business as a Limited Liability Company (LLC) comes with a host of perks.
But before you can enjoy the benefits of operating as an LLC, you need to complete your registration. And the first step involves coming up with a unique name.
What’s in a name, at least when it comes to your LLC? Well, it carries more weight than you think.
Also referred to as a “trade name,” you’ll end up using this name for everything from setting up your business’s bank account and signing contracts, to representing yourself in legal cases.
Since you’re planning on registering your LLC in Texas, having an understanding of the state’s naming requirements is key. If you don’t know the rules, you could waste time coming up with a name that ends up rejected, or that violates an existing trademark. And no one likes rejection…or lawsuits!
So, if you’re a freelancer in Texas, check out the information below to learn more about what it takes to name your business right.
Texas LLC Name Requirements
Your business’s name must end with one of the following:
- Limited Liability Company
- Limited Company
You can even opt to abbreviate the words “Limited” as “Ltd.” or “LTD,” and “Company” as “Co.”
Most people just stick with “LLC”.
For example, let’s say you want to call your business the ABC limited liability company. You can write it out as:
- ABC Limited Liability Company.
- ABC Limited Company
- ABC Limited Liability Co.
- ABC Limited Co.
- ABC Ltd.
- ABC LTD
- ABC L.L.C.
- ABC LLC
- ABC LC
In Texas, your LLC’s name may not contain the following words (or similar terms and phrases):
- Bank and trust
- Trust company
Whatever name you choose shouldn’t be misleading to the public.
For example, your LLC’s name shouldn’t imply a false government affiliation.
This is why using these words isn’t allowed:
Your LLC’s Name Can’t Be Similar to Existing Texas LLCs
Texas law specifies that your LLC’s name needs to be unique in several ways, so you can’t just use any name you want and add “LLC” to the end of it.
Here’s what you should keep in mind as you brainstorm the perfect name for your business:
The name can’t be the same as, or even just too similar to, the name of an existing LLC on file with the Texas Secretary of State.
When you go to file your LLC articles of organization with the Secretary of State, they check to ensure that your proposed name isn’t already used.
If the name is registered by someone else, your articles will be rejected and you’ll need to refile using a new name.
There is an exception, though:
If the other LLC agrees to let you use the name, you might be good to go. Unfortunately, it’s usually either impossible or too expensive to get this consent.
How can you be sure that your name won’t get rejected?
Before filing your articles, check if your ideal business is available in Texas.
If you’re using an attorney, they can help you check for the name’s availability. Just keep in mind that attorney fees quickly add up, and those costs burn when you’re first starting off.
If you’re filing the paperwork yourself, it’s up to you to check the availability of the name. You can perform a search for the name in the Texas Secretary of State SOS Direct website. There is a $1 fee for each search.
But you should be aware that this database only shows you the names of LLCs that are registered with the Texas Secretary of State. This isn’t a good tool if you want to be sure your name is so unique that it doesn’t even match the name of registered businesses in other states.
You can forgo doing all of the searching yourself and let the Secretary of State’s office do it for you for free. Call (512) 463-5555 and then dial 7-1-1 for relay services; or e-mail your name inquiry to Corporations Section.
The Secretary of State will only make a preliminary determination if the name is available. So don’t count on using it until you file your certificate of formation and the Secretary of State accepts it.
We take the guesswork out of the process and help you figure out if the name you’ve chosen is truly the right name for your business.
Want to reserve your name before someone else grabs it?
Let’s say you’ve come up with a fabulous name, and you can’t see your business running under any other name. You’ve done your homework and confirmed that the name isn’t in use, so it’s up for grabs.
But what if someone else comes up with the same brilliant name and snatches it up before you do?! Don’t worry. There’s a strategy you can use to ensure that your dream name will still be available by the time you file your articles.
You can reserve a name for 120 days by filing an Application for Reservation or Renewal of Reservation of an Entity Name (Form 501) with the Texas Secretary of State.
The reservation may be filed online through the Texas Secretary of State SOSDirect website or filed by mail.
The filing fee is $40. But it’ll all be worth it because they’ll hold your name for up to 120 days. During that time, only you’ll be able to file articles of organization using the name.
Also, you can renew your name reservation any number of times by filing a new application during the last 30 days of the hold period.
Businesses with Similar Names in Other States
What if another business is using a similar name in another state? It still might not be a good idea to use it, even if you can register it in Texas.
- You shouldn’t use a name similar to that of a well-known business.
We’re talking about names like Amazon, Tesla, or McDonald’s.
Did you know that these companies will sue other businesses that use similar names? McDonald’s regularly sues companies that use the “Mc” prefix. Pretty extreme, but true.
So, to avoid problems, steer clear of similar business names.
- You shouldn’t use a name that’s similar to another company that sells goods and services that are similar to yours.
If the other business finds out, it might sue you for unfair competition.
To protect yourself, if you only plan on doing business locally, search for the names of local businesses within your niche.
If you plan on doing business around the country, search for businesses on a national level.
How to search for business names that might be similar to yours:
- Perform an online search for the name that you’re hoping to use. See if anyone else, anywhere, is already using it or something similar. Also look into what goods and services they provide.
- Check out SuperPages or the Thomas Register of Products and Services to search for trade and corporate names online. It’s free!
What About Trademarks?
Trademarks are different from business names. We know, it gets confusing. Hold tight, we’re about to explain.
First off, when the Texas Secretary of State registers your LLC name, it merely establishes that name as your LLC’s formal legal name. It doesn’t necessarily mean that you actually have the legal right to use that name, or any form of it, to sell your products and services.
Secondly, there are both federal and state trademark laws designed to protect the names that are used to market products and services. Companies often use a shorter version of their business name as a trademark.
Example: Apple Computer Corporation becomes Apple, which is the trademark for all of those computers and devices everyone loves.
Okay, but what does this all mean for you, the freelancer who just wants to register their LLC and get started making money?
If you choose a name that’s the same or similar to a registered trademark for another business, you might get sued for trademark infringement when you market your products or services. Yikes!
So, in addition to checking if your preferred business name is already registered by another company, you also need to check that you aren’t competing with a trademark.
For details on how to search for registered trademarks, check out our article, Guide to Trademark Research.
What if your LLC’s name is registered as a trademark by someone else?
You’ll need to limit the use of that name to your bank account and legal documents. And that could leave you walking on eggshells.
But, here’s the thing: you don’t have to use your official legal business name to market your goods or services!
Here’s an example of what we mean:
If you registered your LLC as “AAA Web Design, LLC,” you can operate under an assumed name (also called a “DBA,” short for “doing business as”), like “Gorgeous Websites for Cheap.”
Use that name on your website, business cards, promotional materials, advertising, etc. by filing an assumed name certificate.
File this in each Texas county that you have a business office. You must also file a copy with the Texas Secretary of State and pay a $25 fee.
Keep things simple by checking with your county clerk about the specific requirements for filing an assumed name certificate. Or, use an online service like Legalzoom that will do the filing for you for a fee.
Your assumed name can’t be the same or similar to another assumed name that’s already on file in the same county or with the Texas Secretary of State.
And it can’t be a name that might violate a trademark.
So, before you file an assumed name certificate, you’ll need to do more searching—this time, through county records.
Tips for Naming Your LLC
Wow, this information is a lot to take in. Take a breath, and know that you can definitely get it all done and have the perfect LLC name in no time. But, before we send you on your way, we have a few other tips for you.
- Check if your LLC’s name can be used as your domain name
You might need to purchase a domain name that’s owned by someone else or tweak your domain name to find one that’s available.
This link has a list of resources that could help you generate a domain name if you’re having trouble.
- Come up with a distinctive business name that stands out, especially if you plan to use a version of your name as a trademark or service mark.
Think about it: you know exactly what Exxon and Häagen-Dazs are because they’re such original names.
Plus, the more distinctive a business name is, the more protection it receives as a trademark.
On the opposite end, a name that’s not distinctive, or even considered weak, might not get as much, if any, legal protection.
- Choose a name that’s appealing, memorable, easy to use, easy to pronounce, and easy to spell.
Keeping your name short is also recommended.
- Avoid the use of personal names (first names, surnames, nicknames, and initials) in your company name.
Also, avoid names that describe your geographic location, like “Texas Marketing Research, LLC”.
And avoid names that describe the attributes of your products or services, like “Original Web Design, LLC”. Come on, you can do better than that!
Ready to Come Up with the Perfect Name for Your LLC?
When you’re ready to launch your business, start by getting creative and coming up with a list of potential LLC names.
Then, keep things simple by contacting us. Collective helps you perform all of the appropriate searches to find out if any potential names don’t make the cut. And we’ll even guide you through the process of registering your business.
Before you know it, you’ll be one step closer to operating like a pro!
Stephen has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for small businesses, entrepreneurs, independent contractors, and freelancers. He is the author of over 20 books and hundreds of articles and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Among his books are Deduct It! Lower Your Small Business Taxes, Working with Independent Contractors, and Working for Yourself: Law and Taxes for Independent Contractors, Freelancers & Consultants.