Texas Name Search. Finding The Perfect Texas Business Name Can Be Difficult.

By Shannon Stahlin, CEO, Direct Incorporation

Finding a good corporate name that’s also available can be a difficult matter.  In Texas, the issue is more problematic than anywhere in the country.  Texas is one of the Nation’s most entrepreneurial and populous states.  In fact, Texans form over 6,000 new corporations and LLC per month- reserving that many corporate names!

To make matters worse, the Texas Secretary of State instituted the “The First-Two-Word –Rule” a few years ago.  This means that if the first to words of a corporate name are taken, it doesn’t matter what you add to it, the Secretary of State will not approve it.   The Rule even includes root words.  So, for example, “Champion Consulting of Austin, Inc.” would be too similar to “Champ Consultants, LLC”. Along the same lines, “Longhorn Truck Service, Inc.” and “Longhorn Trucking & Transport Corp” would conflict. I should point out that you can swap the first two words and it would still be a problem. So, using the former example, “Consulting Champs, Inc.” would conflict with “Champ Consultants, LLC”.

What is the solution to the Texas business name search problem? I can think of three options:

1. Obtain consent. The Texas Secretary of State will allow a name with the first two words, as long as it’s not the exact same corporate name or LLC name, if the applicant obtains a letter of consent from the prior entity to use the name.

2. Add a Location. If you add a location to the beginning of the company moniker, the name will likely be approved, if there isn’t a company in existence with the first three words. Using the first example above, you could move “Austin” to the front of the business name. “Austin Champion Consulting, Inc” would likely be approved if another company name doesn’t start with those three words.

3. Search further. Keep searching and find a unique business name without any first-two-word issues.  Considering trademark concerns and complications in having a similar name to an existing business, this may be the best route.

    Need help searching a business name in Texas? Please call us and we’ll help you search your business name free at 877 281 6496.

    Or, you can submit a free company name search request online here: http://www.directincorporation.com/name_search/name_search_state=TX

    Thanks! – Shannon


    Dot…Dot…Dot… New web domains could add complications to trademark enforcement.

    By Shannon Stahlin, CEO, Direct Incorporation

    The Internet Corp. for Assigned Names and Numbers (ICANN), just made an announcement that they are opening up an infinite number of domain endings for purchase.

    In addition to .com, .org and .net, people will soon have the opportunity to buy .travel, .soda, .whatever…

    This new announcement made me think of all the trademark issues this new age of Internet could open up. Take Coke for example. Anyone, including competitors, may just be able to buy www.coke.soda for use, complicating Coke’s ability to detect infringement and protect its trademark, not to mention the potential confusion to soda consumers.

    ICANN will take applications for the new domain endings in January of next year, and it assures us that there will be ample time for companies to enforce their trademarks if something like the above happens. Not to mention that the cost of these new domain endings starts at $185,000 with a $25,000 maintenance fee each year.

    AdAge.com wrote a terrific article about ICANN’s announcement. You can find it here.

    I’d love to know your thoughts on this new announcement from ICANN. Post away and I will try to answer any questions that come up. – Shannon

    Great question from Facebook. What are the pros and cons of incorporating?

    By Shannon Stahlin, CEO, Direct Incorporation

    One of our Facebook friends posted a great question on the Direct Incorporation page this week asking whether she should incorporate her business.

    Here’s her question:

    “ So – I write a blog but have not done anything about actually registering a business name or incorporating. I make a little money through advertising, not a lot. Should I make things formal? Wondering about pros and cons, especially cost-benefit tradeoff.”
    – Erika Kerekes, who writes the food blog In Erika’s Kitchen

    Here’s my answer:

    “That’s definitely a great question and I’m happy offer some help. (Read our disclaimer and keep in mind that we are not a law firm and cannot offer legal advice.) There are definitely benefits to incorporating a business that is generating any amount of revenue.

    One needs to balance the benefits with the cost. Not just the cost of incorporating but the cost to keep the LLC/Corp going – particularly, more administrative work and annual fees. The annual fees vary by state. For example, the annual fee is just $15 in Michigan, but $800 in CAL. Which state are you in Erika? As for the administrative work, we have a program to simplify and assist you with “corporate formalities” and deadlines: businesscomplianceprogram.com. We make it pretty easy for our clients to knock down these requirements.

    On the other hand, there are numerous benefits to incorporating or forming an LLC, but there’s a few that stand out. To start, there can be tax benefits, sometimes significant, depending on your choice of entity. You will also legitimize your operation with an official corporate name – In Erika’s Kitchen, LLC. The name also gets locked in with the state, so no other entity can apply for that particular name, which can also kick-start potential trademark rights in the name.

    Another key benefit is the liability protection that an entity offers. The general rule is that if the business is ever sued, you can collect against the business, not the owners of the business. Peace of mind for any business, don’t you think?”
    – Shannon

    We love hearing from clients on our Facebook page. If you have questions, please don’t hesitate to post them on Facebook or right here on our blog. I’ll do my best to answer them. Thanks. – Shannon

    Protect yourself. 5 sound reasons to incorporate your business.

    By Shannon Stahlin, CEO, Direct Incorporation

    Don’t take a wrong turn when starting your journey as a business owner. To properly protect yourself and your assets, you must incorporate your business. Whether you’re a Limited Liability Company, an S-Corporation, or a C-Corporation, incorporating your business offers you the following benefits:

    1. Protect your personal assets. When you incorporate your business, you’re essentially forming a separate legal entity. This means you are limiting your personal liability should there be a lawsuit filed against your business.

    2. Lower your taxes. When you incorporate your business, there are tax deductions for a wide variety of operating costs, which will substantially cut back your company’s overall tax liability. These deductions may include the cost of materials, employee wages, the cost of insurance, the cost of retirement plans, as well as business travel and entertainment expenses.

    3. Raise your capital. A corporation can raise capital from investors easily through the sale of stock, while a sole proprietor cannot.

    4. Leave a legacy. The life of a corporation is not dependent on the life of a particular individual. It can continue indefinitely and is not affected by the death or withdrawal of shareholders, directors or officers of your corporation.

    5. Enhance your image. Another essential reason to incorporate your business is that it adds credibility to your operation. The perception of a business is improved by its incorporation and use of “Inc.,” “Co.,” or “LLC” following the name of the business. Customers are more likely to trust and deal with a business that has this positive image. More importantly, your business will be more attractive to banks and investors if and when you seek outside financing.

    Do you have questions about incorporating? Please leave a comment below and I will try to answer them. Thanks! – Shannon