Name Reservation California

What Are the Naming Rules in California?

First, let’s take a look at the two general rules of coming up with a name for a business in California:

• Permissible Characters:Only English letters, Arabic numerals, spaces, periods, commas, hyphens, ampersands, and apostrophes are allowed. Other alphabets, symbols, accents, and formatting variations are not recognized.
• Distinguishability:Your name must be clearly different from existing registered business names or trademarks in California. If you’re confused about how to check whether your name is unique, you can check if a name is already in use by a business using the Secretary of State’s Business Search

Here are some other requirements that you have to keep in mind when giving your business a name:

• Business Entity Type:The required ending depends on your business structure. For example, if it’s a corporation, it must include “Incorporated,” “Corporation,” “Limited,” or their abbreviations (Inc., Corp., Ltd.) at the end of the name. If it’s a limited liability company (LLC), then it should have “Limited Liability Company” or its abbreviations LLC, L.L.C., Ltd. Co., at the end.
• Restricted Words: Avoid words that suggest you’re engaged in activities that require special licenses or permissions (e.g., Bank, Trust, Insurance).
• Personal Names:Use them cautiously, as they might not grant exclusivity or uniqueness.
• Descriptive Names: While not prohibited, overly descriptive names might lack distinctiveness.

While following the rules for naming, you should try to choose a name that’s adaptable to potential growth, allowing for the possibility of adding more services or products. It should also reflect your brand identity and be easy to remember and pronounce.

Lastly, you need to make sure there are no potential trademark conflicts to avoid future legal issues in a proactive way.

What Is a Corporation?

A corporation is a separate legal entity from its owners (shareholders). It exists independently and has its own rights and liabilities, distinct from the owners’ personal finances.

Ownership here is by shareholders who purchase shares of the company’s stock, who have limited liability. This means their personal assets are generally protected from the corporation’s debts and liabilities. This is a major advantage for business owners.

The structure is also more complex, with a board of directors, officers, and various formalities. A corporation typically pays corporate income tax on its profits, regardless of whether they are distributed to shareholders. Shareholders also pay taxes on dividends received.

Examples of corporations include large companies like Apple, Microsoft, and Amazon.

What Is a Limited Liability Company (LLC)?

In contrast, an LLC is a hybrid entity combining features of a corporation and a partnership that offers limited liability protection but operates more flexibly than a corporation. Ownership in an LLC belongs to members who contribute capital or services to the company.

They also have limited liability, similar to shareholders in a corporation, which means their personal assets are generally protected from the LLC’s debts and liabilities.

Contrasting with a corporation once again, the structure in a limited liability company is more flexible with less formality than a corporation. This translates to less paperwork and fewer regulations.

Moreover, it’s not taxed at the entity level. Profits and losses “pass through” to the members and are reported on their personal tax returns, which can be advantageous for small businesses.

Examples include small businesses, professional practices, and family-owned companies.

How Long Can You Reserve a Business Name in California?

A reserved business name in California lasts for 60 days from the date of filing. However, there are some important details to keep in mind regarding this duration:

Renewal

You cannot renew a business name reservation for consecutive periods in California. While some states allow renewals, California does not.

If you haven’t filed your business formation documents within the initial 60 days, you need to file a new reservation application if you still want to use the same name. Business formation documents are Articles of Incorporation for corporations or Articles of Organization for LLCs.

Processing Time

Keep in mind that the 60-day period doesn’t begin until the Secretary of State processes your reservation application. Processing times can vary depending on workload but typically range from 5 to 8 business days. So, factor in this processing time to ensure you have enough time to complete your business formation within the 60-day window.

Once you submit your business name reservation application in California and the processing period begins, there isn’t necessarily anything specific you need to do. However, here are some things to keep in mind:

Monitor the Status: While processing times are usually 5-8 business days, there can be delays. You can monitor the status of your application on the Secretary of State’s website using the application number you received upon submission.

Prepare to File Formation Documents: If you’re confident about your chosen name and want to secure it permanently, you can start preparing the required documents for forming your business.

Prepare Alternative Names: In case your preferred name isn’t approved, having one or two backup options might save you time later. You can check their availability using the Business Search tool on the Secretary of State’s website.

Expiration

Your reservation expires at the end of the calendar year it was filed, regardless of whether it’s the 60th day or not. For example, if you reserve a name on November 15th, 2024, it will expire on December 31st, 2024, even though it hasn’t been 60 days.

Alternative Option

Consider filing formation documents first if you’re confident about your chosen name and want to secure it permanently. While forming your business might seem like a bigger step, it grants you official name protection and eliminates the risk of losing the name during the reservation period.

You can submit three potential names with your reservation application, ranked in order of preference. The Secretary of State will grant only one of the names, and you can register a business name online, by mail, or in person at the Secretary of State’s office.

How Much Does It Cost to Reserve a Name in California?

The mandatory charge by the Secretary of State for processing your application is called “Name Reservation” fee and it costs $10. The payment can be made electronically (credit card or debit card), by check, or by money order made payable to “Secretary of State of California.”

There is an optional service offered by the Secretary of State called Priority Telephone Service. It allows you to call them directly to check name availability and submit a reservation request over the phone.

To use this service, you need to set up a prepay account with a minimum deposit of $100. Once the account has been made, there is a $4 search charge per name and a $10 reservation fee. This option might be faster than online or mail submission but comes with additional costs.

How Do I Look up a California LLC?

Looking up an LLC in California is a straightforward process, and there are several ways to do it, each with its own advantages and limitations. The one you pick has to align with your preferences – here’s a breakdown of the 4 most common methods:

1. California Secretary of State Business Search

• Website: California Secretary of State
• Cost: Free
• Information Provided: Basic information like entity name, status, filing date, registered agent name and address, and entity number with limited financial or ownership details
• Best For: Basic checks, verifying existence, confirming basic details when starting the process of LLC name reservation in California

Here is how to use it:

1. Open the California Secretary of State website.
2. Under “Search Type,” select “LP/LLC Name” or “Entity Number.”
3. Enter the LLC name (partial match works) or entity number.
4. Click on “Search.”
5. If results appear, select any LLC to view more details about it.

2. PACER (Public Access to Court Electronic Records)

• Website: https://www.pacer.gov/
• Cost: Varies depending on documents accessed
• Information Provided: Court filings associated with the LLC, including lawsuits, judgments, and bankruptcy proceedings
• Best For: In-depth research, uncovering potential legal issues or financial problems

Here are the step-by-step instructions:

1. Go to the PACER website.
2. Create an account (free for basic searches).
3. Select “Federal Courts” and then “California.”
4. Search by party name (enter the LLC name).
5. Filter by case type if necessary.
6. View available documents and pay any associated fees.

3. Dun & Bradstreet

• Website: https://www.dnb.com/
• Cost: Requires subscription or pay-per-report
• Information Provided: Comprehensive business reports with financial data, creditworthiness ratings, and ownership information
• Best For: Detailed business analysis, competitor research, credit checks

To use this method, follow the steps below:

1. Go to the Dun & Bradstreet website.
2. Create an account or get a paid subscription.
3. Search by company name (enter the LLC name).
4. Purchase the report you want to see (prices vary).

4. Professional Services

This option is for seeking an external professional’s help that can handle not just the name lookup, but even the entire name reservation process for you.

• Cost: Varies depending on service and provider
• Information Provided: Comprehensive investigations including public records, court filings, and social media analysis
• Best For: Highly sensitive scenarios requiring in-depth due diligence or background checks

Here’s how it works:

1. Research and choose a reputable business investigation service.
2. Contact the service provider and discuss your needs.
3. Obtain a quote and agree on services and fees.
4. Provide necessary information about the LLC.
5. Receive the final report with detailed findings.

As stated earlier, each of these methods is appropriate for a different purpose. If your needs can be met with the free option from the California Secretary of State search feature, you should be fine with that. For businesses with more specialized needs or requests, the other three methods may be more appealing.

Name Reservation Request Form California

The California Name Reservation Request Form helps you reserve a potential name for your future corporation, limited liability company (LLC), or limited partnership. Here’s a detailed breakdown of the form:

Section 1: Applicant Information

• Your Name: Enter your full legal name.
• Firm Name: Include the current name if there is one, or leave it blank if there isn’t.
• Address: Enter your complete mailing address, including city, state, and zip code.
• Phone Number: Provide your contact phone number.
• Fax: If you have a fax number, enter it here in its standard format.
• Email Address: If applying online, include your valid email address for communication.
• Type of Entity: Choose the type of business entity you’re planning to form (Corporation, Limited Liability Company, Limited Partnership).

Section 2: Name Information

• Desired Name (1st Choice): Enter your preferred business name. Remember, names cannot contain special characters, except for apostrophes, periods, commas, hyphens, ampersands, and spaces.
• Desired Name (2nd Choice): Enter your second name choice in case your first option is unavailable.
• Desired Name (3rd Choice): Include your third name choice if you have one.
• Suspended/Forfeited Entity Name & Number: Only complete this section if reserving a name used by a previously suspended or forfeited entity. Provide the entity name and number.

Section 3: Suspended/Forfeited Entity

A suspended or forfeited entity is an association that has lost the rights and privileges of a corporation. If this applies to your business, check the box and enter your entity number in the given space.

Section 4: Mail Back Response

Check this box if you submitted the form in person and want the reservation confirmation mailed to you. Include a self-addressed envelope.

Section 5: Fee Information

• Reservation Fee: Enter the $10 reservation fee (payable by check or money order made out to “Secretary of State of California”).
• Special Handling Fee (optional): Check this box and include an additional $10 fee if you’re submitting the form in person.

Should You Reserve Your Business Name in California?

Whether you should reserve your business name in California depends on a number of factors. Compared to some other states, California has stricter naming rules regarding permissible characters and limitations on certain words.

If you’re looking for alternative states, you may consider Delaware – popular for business formation due to its flexible corporate laws and ease of name reservation (renewable). However, incorporating in Delaware might not offer local benefits in California.

Another good option with simpler name reservation procedures and longer reservation periods is Nevada (has a reservation period of 6 months).

If getting your desired name is important to you and you plan to form your business soon, California reservation might be worthwhile. On the flip side, if you’re flexible with your name or have a longer lead time before forming your business, exploring other options or waiting might be more appealing.

Start the Name Reservation Process in California

As far as legal formalities go, the state of California makes the process of name reservation pretty straightforward and easy. The only concerns to note, which are going to be true in other states as well, include the significant processing time and the naming restrictions that may sometimes require you to change your name slightly.

Apart from that, you should have no issues following the steps outlined in this article, and within two months, your name should be reserved. Just make sure that it aligns with the company’s brand values, doesn’t restrict you to a single service or product, and makes you stand out.