Have you come up with a great name for a business, but you’re not yet ready to tackle the actual LLC formation process to create your company?
You can actually reserve a business name in any state by completing a rather simple registration process, which saves that name and prevents other entrepreneurs from using it until you’re ready to form your business. But is this a good idea, or is there another option that would work better for you?
You might be surprised by how many questions we hear from our readers regarding the business name reservation process, so we wrote this article as a means of answering those questions in a convenient manner. If you’ve ever wondered about the advantages and disadvantages of reserving a business name, read on as we walk you through all the details.
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How to Reserve a Business Name
The first step of reserving a business name in any state is to search your state’s business database to determine if the name you want is available.
If there’s another company that is already using the same name as yours, or if your name is very similar to any existing business name, your state will not let you reserve it or register a business with it. Every state has an online business database, so it should be quite simple to determine whether your desired name is taken or not.
Once you determine that your business name is available, you can reserve it for later use. By securing a reservation for your name, you can make sure that no one else uses it until you’re ready. Depending on your state, the length of time a name reservation lasts for can vary. Typically, a reservation will hold your name for a few months, but even if it expires, most states will allow you to submit another reservation.
Pros and Cons to Reserving a Business Name
As with any other aspect of the business world, there are both advantages and disadvantages to business name reservations. Let’s take a look at some of the pros and cons, and perhaps you’ll figure out if reserving a business name is the right option for you.
Pros
- Secures your business name until you’re ready to form your entity: The biggest advantage of business name reservations is the fact that you can prevent other entrepreneurs from using your chosen business name until you’re fully prepared to tackle the formation process. There’s no reason to hurry when you know your name will be there waiting for you when you’re ready.
- It’s easy to reserve a name: Although the exact information required does vary a bit from state to state, the form you’ll need to fill out to register your name reservation is quite simple. In most states, you’ll just need to tell them the name you want, the type of business entity you’re reserving it for, your name and address, and other routine information. There’s no complex process to navigate if you want to reserve a business name.
Cons
- It costs money: The actual cost for business name reservations varies by state, from as little as $10 in states like Iowa, Michigan, and North Dakota, to as much as $140 in Pennsylvania. Regardless of where you reserve your name, you will have to pay some sort of registration fee.
- Limited time reservation: Reserving a business name doesn’t give you the rights to that name indefinitely, and you really should at least be close to the formation phase when you register a reservation. This is because your reservation is only good for a limited time, usually 3-4 months, although the exact duration varies by state. You can always renew a registration, but you’ll need to pay the filing fee again each time you do so.
How Much Does It Cost to Reserve a Business Name?
Every state has its own fee for business name reservations, and to make it easier to figure out how much you’ll need to spend, we compiled this list of the applicable fees for all 50 states.
- Alabama – $110
- Alaska – $25
- Arizona – $45
- Arkansas – $25
- California – $14
- Colorado – $25
- Connecticut – $110
- Delaware – $75
- District of Columbia – $85
- Florida – N/A (cannot reserve business names, must register a DBA name)
- Georgia – $25
- Hawaii – $33.50
- Idaho – $40
- Illinois – $25
- Indiana – $11.22
- Iowa – $10
- Kansas – $30
- Kentucky – $15
- Louisiana – $55
- Maine – $70
- Maryland – $45
- Massachusetts – $30
- Michigan – $10
- Minnesota – $45
- Mississippi – $25
- Missouri – $25
- Montana – $30
- Nebraska – $30
- Nevada – $75
- New Hampshire – $15
- New Jersey – $100
- New Mexico – $25
- New York – $45
- North Carolina – $130
- North Dakota – $10
- Ohio – $139
- Oklahoma – $10
- Oregon – $100
- Pennsylvania – $140
- Rhode Island – $50
- South Carolina – $10
- South Dakota – $75
- Tennessee – $20
- Texas – $65
- Utah – $22
- Vermont – $20
- Virginia – $20
- Washington – $80
- West Virginia – $15
- Wisconsin – $40
- Wyoming – $50
Can You Hire Someone to Reserve Your Business Name?
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The business name reservation process isn’t very complicated, but if you don’t want to use the DIY option, you can hire an online business services company to do it for you.
There are quite a few companies out there that will reserve a business name for you, and if you want to use their services to form an LLC as well, you have that option when the time comes. Most of them also provide registered agent service, so you can kill several birds with one stone if you’d like to.
Conclusion
If you’re not ready to form your business entity quite yet, but you plan to do so in the near future, you can go ahead and reserve your desired business name today. This ensures that no one else can claim your name before you complete the formation phase, although it’s important to note that a reservation usually expires in 3-4 months.
We hope this article helped you improve your understanding of business name reservations, and we thank you for visiting Registered Agent Ready to learn about the exciting world of American business!