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An overview of how to name a business

On Behalf of | Jan 27, 2020 | Business Law

Creating a new business involves many aspects that require careful thought and consideration, including coming up with a name for the business. Pennsylvania law places a number of requirements on how to name a business. In some cases, the law forbids a business from using certain words in its name. In other instances, a business may require specific words in its name.

State law requires that a new business not use the same name as an existing business or a name already registered under Sections 208 or 209 of state law. A business should possess a name different from other businesses already in operation. However, Pennsylvania law does describes some circumstances that might allow you to take a name already in use.

To begin with, another business may have your chosen name, but that business will change the name at a future date. Alternatively, the business with your preferred name might no longer be in operation or has not filed a tax return in three years. Some businesses had a certain name at some point but abandoned it through a merger, dissolution, consolidation, or some other transformative process, which can make the old name available for use.

Depending on your type of business, state law may forbid you to employ certain words in your business name. Businesses that are not banks cannot use any words implying that they are banks. Likewise, businesses that are not insurance companies cannot contain words like “insurance,” “insurer” or “assurance,” basically anything to indicate that they provide insurance. Similarly, businesses may not use terms implying that they are colleges if they are not credentialed educational institutions.

Conversely, state law may require you to include some words in your business name depending on the business structure you choose. If you set up a limited liability company, the name should include the phrase “limited liability company,” or words like “limited” or “company.” If not, an abbreviation will suffice. Other requirements will apply to different business structures like limited liability partnerships and corporations.