When it comes to starting a business, people are often confused as to the protections and benefits you gain from forming a business entity, such as an LLC or S-Corp vs. registering their business name as a trademark. These are actually two separate processes and you may need to do both in order to achieve your goals. Here’s a look at what each option is used for.
A business entity is a legal structure and it’s something you register for with your state. You are essentially letting the state know that you are starting a business and notifying the state of the members, structure, location, etc.
Forming a business entity helps to protect the individual(s) owner(s) from being held liable for the actions of the business. Likewise, having a legal entity may provide tax benefits and will allow the business to enter into contracts, open bank accounts, etc. that are separate from the owner. Your state may have rules that dictate how you can name your business, but this name will simply represent your entity and will not provide you with any inherent intellectual property rights.
Trademarks are what identify your business or brand as the source of a product or service. Obtaining a trademark in the US is a process conducted through the United States Patent and Trademark Office. Once a trademark registers, the rights afforded are nationally (not internationally) recognized. Trademark rights protect a name, logo, or tagline, etc. from use by anyone else on the same or similar goods and services. It has nothing to do with the operational aspects of your company, tax benefits, or any other feature of having a registered entity with your state.
Which do I Need?
Again, for many business owners, the answer is both. However, it’s a wise idea at the very start of your company’s formation to perform a search of your desired name from a trademark perspective. You’ll want to see if anyone else is currently using the name you want, or something confusingly similar in the same class of goods and services that you provide. Even if you decide not to register your trademarks right away, you will have an idea if your name is safe to use so that you don’t get sued or have to change the business name later.
Our trademark attorneys are here to answer your questions and help you prioritize the legal steps you should take as you start your company. We want you to have total peace of mind that as you launch your operations and build your brand, you will be doing so without infringing on someone else’s mark or running into unnecessary legal headaches down the road. To schedule an appointment, contact our trademark attorneys at (888) 666-0062.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.