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Selecting a Name for Your New North Carolina Business.

Selecting a name for your new North Carolina business is one of the most important initial decisions that you will make. Why? If you simply select a name without performing any clearance, there is a good chance that another business will contact you and demand that you stop using your name because it is too close to the name of that other business or to the name of similar products or services offered by that business.

You may also encounter problems when you try to incorporate your company through the North Carolina Secretary of State (“NC-SOS”). The NC-SOS produces an excellent online pamphlet available online really this is must reading for anyone who wants to form a business in North Carolina. The very first section of the pamphlet addresses name selection.

In North Carolina, there are two (2) principal requirements for selecting a name with respect to the NC-SOS, which are that:

  1. The name must not contain any language stating or implying that the corporation is organized for any purpose other than a purpose that it is lawful and permitted by its articles of corporation.
  2. The name is “distinguishable upon the records of the Secretary of State from the name of any domestic corporation or the name of any foreign corporation authorized to transact business or conduct affairs in North Carolina.”

In essence, these NC-SOS restrictions require you to perform at least some minimal pre-screening of a corporate name.

In practice, the NC-SOS typically will accept even slight variations for purposes of satisfying the above “distinguishable upon the records” requirement. Therefore there are many North Carolina corporations with similar names. Assume, for example, that “XYZ Corporation” is registered with the NC-SOS. If you wanted to incorporate as “XYZ Ceramics Corporation,” the addition of the word “Ceramics” would satisfy the “distinguishable” requirement. However, if XYZ Corporation is heavily engaged in the ceramics industry and well known, you may still have a larger trademark clearance issue and concerns about infringement, notwithstanding the fact that the NC-SOS will permit registration of XYZ Ceramics Corporation.

For this reason, simply satisfying the NC-SOS name selection requirements for incorporation does not mean that you are free and clear to use the name. Clearance for purposes of NC-SOS incorporation does not equate to clearance for trademark purposes. From a trademark standpoint, a broader preliminary check is warranted and highly advisable.

For trademark clearance, there are some very simple steps for reducing the risk of infringing someone else’s rights in a particular name or trademark. There are also more advanced and complex steps clearance options that will even further reduce the risk of an infringement and also potentially provide greater enforcement rights in a potential name. Often these additional steps are handled through engagement of a trademark attorney.

Even if you do not wish to take these more advanced and complex steps at the very least, it is highly advisable to do the following:

  1. Google your contemplated name and study your search results. Is there a well-known entity, especially in the field that you are planning to enter, using this name either for its’ company or for its goods or services. If so, you may have an issue. Try searching Google in various different ways and be sure to review more than just the first page of search results.
  2. Check both the NC-SOS corporations index and the NC-SOS North Carolina State trademark registration index found at the following link: http://www.secretary.state.nc.us/trademrk/ThePage.aspx
  3. The Federal Patent and Trademark Office also maintains a database of federally registered trademarks and pending applications found at this link http://tmsearch.uspto.gov/bin/gate.exe?f=tess&state=4802:177iqt.1.1. The basic search function permits you to type in your contemplated name to see if there is a federal trademark registration covering it. In general, it is best to search as narrow a portion of your name as possible to maximize the number of related “hits.” For example if you are thinking of the name Acme Publishing Company, you should search the name “Acme” by itself rather than “Acme Publishing” or “Acme Publishing Company.”
  4. Because many businesses operate under an assumed name it is also advisable to at least check the Register of Deeds in your county to see if there is an assumed name certificate filed for the particular name that you are contemplating.
  5. It is also advisable to check domain name availability for your contemplated company, and, ideally, to secure your new company’s “.com” domain name.