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