When you meet someone new, what’s the first thing you want to know about them? Their name. Your name is unique—it’s how people remember you.
The same goes for your Texas business: choosing your name is the most important step of forming your company. Unfortunately, it’s not as simple as just picking the name you like best from a list. That works for babies, but not businesses. Texas has several requirements that you’ll need to follow as you pick a name.
Fortunately, this five-step guide will help you pick a name that is both perfect for your business and compliant with state laws. We’ll also cover how to reserve your name once you’ve picked it. Let’s get started.
NOTE: If you have found the perfect business name and would like to begin the process of registering your business with the state, there are a lot of business formation services — like LegalZoom and Zen Business — that can do it for you.
1) Review Texas Name Requirements
Texas has three primary requirements for naming your business. First, your name must include a designation of the type of company you’re forming. For example, if you’re forming a Limited Liability Company, you’ll need to include “LLC,” “Limited Liability Company,” or an abbreviation of those terms. Corporations must include “Inc.,” “Incorporated,” “Corporation,” etc. Regardless of what kind of entity you make, your name should reflect your business type.
Second, your name must be distinguishable from other business entities in Texas. If it’s too similar to another name, your filings could get mixed up with the paperwork for the wrong entity. And worse, a super-similar business name could confuse your customers.
For example, “Texas Lawn Care Bros, LLC” and “Texas Lawn Care Bros, Inc” are too close. A mere difference in entity type identifier is not enough to make your name distinct. Texas law states that your name cannot be “the same as, or deceptively similar to” the name of another entity. So as a general rule, you’ll need to make sure your name both looks and sounds different from others.
Finally, Texas prohibits the use of certain wording in your name. For example, you cannot include the word “lottery” in your name. Your name also cannot imply that your business is organized for a purpose other than your stated corporate purpose.
2) Create the Perfect Name for Your Texas Business
Now that we’ve covered all the things you can’t do with your business name, let’s focus on what you can do. Here’s where you can let your creativity shine. As long as you meet the Texas requirements, you can pick just about anything you like.
However, to make your business name perfect, here are a few things to keep in mind:
- Pick a name that represents your business: Your business name is the first impression you’ll send to potential customers; you want to make sure it’s the right impression. So, be sure to include important aspects of your business in your name. For example, if you’re starting a restaurant that specializes in vegan fare, you’ll want that to be clear by your business name.
- Write it down and say it aloud: Your business name appears everywhere—business cards, your website, company signage, and more. A good name will look good on paper. But you’ll also say your name a lot, too, so make sure it sounds as good as it looks.
- Choose a name that you’re proud of: Do you like the name you’ve come up with? You love your business, and you should love the name that goes with it. If you love the name, then you’re good to move on to step three.
3) Search Your Chosen Name with the Texas Secretary of State
Now it’s time to check that your business name is available in the state of Texas. To do so, you’ll want to run a Taxable Entity Search.
Here’s how it works: input the business name you developed in Step 2. If the state’s search tool doesn’t find any results, then good news! Your name is available for you to use in Texas. However, if it does find a match, you’ll want to start over or tweak your name a little to make sure it’s different from what’s currently in use in the state.
Most states offer a database of business names powered by the Secretary of State. However, Texas does things a little differently. The Taxable Entity Search is technically a database powered by the Texas Comptroller, which handles the taxation of business entities. As a result, this search is a helpful starting point, not an authoritative source on name availability.
For a more thorough indication of name availability, you can call or email the Secretary of State to inquire about your name. This process might take a little more time, but it may serve you better.
While this step may seem like a hassle, it can save you time in the long run. You’ll need to put your business name on your formation documents; if you put down a name that’s already in use, the state will send it back to you, request a change, and you’ll need to file all over again. This could potentially slow down your start-up process by several days or even weeks. Searching your name ahead of time prevents that slow-down.
4) Reserve Your Business Name with Texas
You’ve done the legwork to make sure your business name is free to use in Texas. Now, let’s ensure that none of that work goes to waste by reserving your business name with the state.
In Texas, you can reserve a business name by filing an Application for Reservation of an Entity Name.You can file this form by mail with the Secretary of State. Be sure to include two copies as well. The Secretary of State will file one copy and return the other one to you with an official designation. This form requests some information about your business, contact information and a signature for the applicant, and of course, the name you wish to reserve.
Texas requires a fee of $40 for this name reservation. You can pay by check or money order made payable to the Secretary of State or by card. There is a 2.7% convenience fee for card payments..
Reserving your name will protect your business name for 120 days. While it’s unlikely that another person will come up with the exact name you’ve chosen, this process prevents anyone else from using your name. The 120-day-long reservation gives you plenty of time to get all your affairs in order and file your formation documents.
5) File Your Texas Formation Documents
Even though filing a reservation gives you 120 days of exclusive rights to the name you’ve created, you’ll need to file your formation documents to make everything official. The document you need to use varies depending on the type of business you’re forming, but it’s often called the Articles of Incorporation or the Articles of Organization.
The Corporations Section of the Texas Secretary of State serves as a helpful starting point for forming your business. Here you’ll find the forms you need to start your business, including the Texas Certificate of Formation. You’ll also find easy access to forms such as name reservations, amendments, registered agent changes, and more.
Conclusion
Conducting a business name search is an important part of forming your business in Texas. The search saves you time and helps you set up a name that makes your business stand out. We hope this guide made it simple to name your business.