Longer names matter; the business (or person for that matter) will come across as more important. In fact, 22 presidential elections showed just how important this is: According to this article, “[B]etween 1876 and 1960… the candidate with more letters in his last name won the popular vote 20 times.” The reason why the elections after 1960 didn’t follow suit? Television…which then made tallness a bigger factor.
What we are trying to say is there are more “sneaky” facts around a business name and the business name search that leads to it. In which case, we found 5 especially noteworthy things you probably wouldn’t think of when conducting a business name search.
Read on to learn why not every trademark has the same protection and why businesses want two names instead of one. That, and more surprising facts that pertain to corporation search.
1. You won’t see many corporations in Alaska
When you conduct a corporation search, you probably won’t see many corporations in Alaska. The reason being is that, while the 49th state has no income tax, it has one of the highest tax rates for corporations. To put this more into perspective, a corporation that makes over $220,000 will be taxed 9.4%.
To contrast this, Texas has a franchise tax which many corporations benefit from, that is at 1%. (It is often called a “privilege tax” because the tax serves more as a thank you for conducting business in that state.)
In case you were wondering, the Alaskan local and state governments do receive revenue, more than two-thirds in the forms of excise, stock transfer, estate, severance, and gift taxes.
2. Delaware and Nevada: Great for corporations, not so much for small businesses
Many Fortune 500 companies are incorporated in Delaware or Nevada. This is because the securities law and other business regulations are “looser” than other states’ business laws. So, when you’re running a business name search, chances are, you’ll see many companies that are in these two states.
However, what many people don’t know is that small businesses may not do so well in these states simply because they aren’t huge corporations with a significant number of shareholders. Meaning the same rules that apply to corporations do not apply to them. In fact, this article stressed that personal assets may not be protected. To get asset protection the owner would need to register the business in that state. To do so, most of the shareholders would need to reside there and/or a significant amount of the customers would need to be Nevadans.
3. Trademarks are not all equally protected
You’d think that after conducting a trademark search and then registering the mark, a business would be safe and sound. Actually, not always. Instead of an either-or system, trademark protection runs on a “protection spectrum.”There are several degrees of strength: generic, suggestive, descriptive, and arbitrary. The level of protection is dependent on the strength of the mark.
For example, trampoline is a generic (nonexistent) trademark because it refers to a product category, not a specific product for a specific business. The search engine, Yahoo!, on the other hand, is a much stronger (arbitrary) mark. Generally, if you use the mark in your everyday life, chances are, the mark is slowly suffering “genericization.” This is the case for companies like Kleenex, Botox, and Aspirin. To resist potentially lower trademark protection (and to maintain a strong brand presence), according to an article, many companies have notified journalists and magazines to include the trademark symbol after the name.
However some trademarks have become too generic, leading to no trademark protection. So, when you do a trademark search, you may find that a company’s trademark has been revoked. Such is the case with Dry Ice, Trampoline, and Escalator.
4. Two names are better than one
It is better for a business if they have an official business name and nickname. Consumers are more likely to remember at least one of the names, increasing company awareness. Usually when two names are involved, one is more formal than the other. Typically, the official business name is the more formal; the nickname is the “slang version.” Examples of companies that have two names include Charles Shaw (Two Buck Chuck), Kentucky Fried Chicken (KFC), McDonalds (Mickey Dee’s), and United Parcel Service (UPS).
However, not every business wants two names. Kentucky Fried Chicken wants to be known as KFC, which is their nickname. Kentucky Fried Chicken implies that the business is in Kentucky and caters towards Kentuckians. While KFC insinuates it’s a franchise with a larger customer clientele. In which case, KFC chose to appeal to their larger audience.
5. The Internet makes things complicated
Technically, two businesses can have the exact same name. In order for this to happen, they cannot be a trademarked franchise, conduct business or have registered their business name in the same state. (So, when you conduct a business name search, you should not be surprised to see two identical names in different states.) Unfortunately, with the advent of the internet, there is some difficulty.
Suppose two pet stores named Pet Love registered their names on two different secretary of state website: Texas secretary of state and California secretary of state. Each store has several customers that purchase product from the brick-and-mortar Texas and California stores. However, they both sell a lot of product online. Since anyone can access the Internet, a customer who is a longtime customer of the Pet Love Texas store may confuse the California store with their favorite. Which then may cause an infringement suit.
Bonus: Official Name is at the Ends; Nickname, the middle
If you want to conduct a business name search but don’t know which name is the official name, do this. Find a piece of marketing material about the company: press release, or television or magazine advertisement. Find the name in the beginning and end of the material. This should be the company’s official name. The nickname will appear in the body of the content. Put it this way, most companies want to be called their nickname but known for their official business name.
Questions and Comments about business name search
Visit the Sec State database for easy navigation of the secretary of state websites, including the California Secretary of State page, Texas Secretary of State page, and many more.