When forming a corporation in California, it is important to keep in mind the rules that the California Secretary Of State’s Office uses when reviewing formation filings.
You should also look ahead two or three moves ahead, like a chess match, and consider what the U.S. Patent & Trademark Office will consider when reviewing a trademark application to protect the name of your business.
Naming Rules When Forming A California Corporation
The California Secretary Of State’s Office has a few quirky rules for naming your California corporation. Some of the most frequent reasons a filing gets rejected include:
1. Geographic Designation
For purposes of running a conflict check when approving the articles of incorporation, the Secretary Of State’s Office drops geographic designations of the names of places.
For example, when reviewing a filing to create California Sushi Bar Inc. the word California would be dropped when evaluating the name and the filing would be rejected if there already was a Sushi Bar Inc. registered with the California Secretary Of State’s Office. Similarly, a filing for America Sushi Bar Inc. would also be dropped as America is also the name of a place.
In contrast, Californian, unlike California, would not be dropped and so Californian Sushi Bar Inc. could be approved as Californian is not the name of a place. In addition, American, unlike America, would not be dropped and so American Sushi Bar Inc. could be approved.
To further complicate the geographic designation rule, it only applies to California corporations and not to LLCs.
In doing its name conflict analysis, the California Secretary Of State’s Office also drops numbers.
For example, 10 Hot Wings Inc. would be rejected if there already was a Hot Wings Inc. registered with the California Secretary Of State’s Office.
3. “Scream Words”
The Secretary Of State’s Office also has a list of what it describes as “scream words” that will cause a filing to be rejected.
For example, if you file articles of incorporation to form Californian Sushi Bar LLC Inc. the filing will be rejected as it has the scream word of LLC in a filing to create a corporation.
4. Names Of Other Entities
Finally, the California Secretary Of State’s Office has separate databases for corporations, LLCs and LLPs and so it could approve a filing to form a corporation with the same core name of an existing LLC.
For example, a filing to create Californian Sushi Bar Inc. might be approved even though Californian Sushi Bar LLC already exists.
That being said, you should also consider trademark law to make sure your company name does not get you in legal hot water.
You can read more here, but long story short you also need to take into consideration trademark law when naming your company.
A trademark is a recognizable word, phrase, design, or expression which identifies the source of a good or service. Registering your trademark on the U.S. Patent and Trademark Office’s (USPTO) federal registry provides you with a legal presumption that you are the rightful owner of that mark nation-wide. This means that if you file a claim for trademark infringement based on a federally registered mark, the burden is on the other party to prove they were not infringing.
The two most frequent reasons a trademark application gets rejected are:
1. Likelihood of Confusion
The question of whether another mark presents a conflict to your trademark’s registration is one that is difficult to assess. The test for trademark infringement is “likelihood of confusion.” This is not a quantitative test, and there is no set rubric for which to score or grade your risk. Instead the USPTO looks at several factors and weighs the totality of the situation, with the most important factors being (a) the relation between the goods or services; (b) whether the goods or services compete; and (c) the similarity of the marks in terms of their appearance, meaning and sound.
2. Merely Descriptive
Another common objection that the USPTO cites against a trademark application is that the mark is “merely descriptive” of the goods and/or services with which it is associated. The USPTO is hesitant to provide trademark protection to descriptive aspects of a trademark, in part because of the belief that one party should not have a monopoly over a widely used word or phrase.
You can learn more about how Bend Law Group helps businesses with their trademarks and brands at the Bend Law Group Trademarks website, www.blgtrademarks.com. Please don’t hesitate to contact us at email@example.com or (415) 633-6841.
Disclaimer: This article discusses general legal issues, but it does not constitute legal advice. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.