Most people will spend hours brainstorming to find the perfect business name – the one that represents your brand, the products you offer, and that is easily promotable and infused with personality. To help the creative process you might surf the web, read a few business magazines, finally open that dictionary that’s been collecting dust, and crowdsource ideas and feedback from your friends and colleagues.
As you search for the perfect name, keep three main questions in mind:
Will your business name receive trademark protection?
Is your desired business name available?
Is the domain name available? (assuming you want to have a website).
Sadly, there is no universal guideline for the creative process. Just keep in mind which sector you’re about to enter, and don’t compromise on your sense of taste – you absolutely want to love a name!
Here are a few suggestions for choosing the perfect name for a startup:
Choose a name that is distinctive, memorable, easily spelled and pronounced;
The name should have a positive association in all languages/countries that you plan to enter;
Ideally, it includes the main keywords of the products or services you offer;
And pick a unique name that’s not similar to your competitors’.
Now, let’s have a look at some legal aspects of naming your business. Here are a few things you need to know:
The difference between the legal name and a fictitious business name
The legal name of a business is the official name of the person or entity that owns this business. If the business consists of just an owner, its legal name would be the owner’s full name. If it is a partnership, based on a written partnership agreement that includes a name for the partnership, then that partnership name is the legal name of the business. Yet if there is no written agreement, the legal name of the partnership consists of last names of the owners.
For corporations, the legal name is the name registered with the trade registry. The legal name of a business will be required on all government forms and applications and is especially important on the application for a federal employer identification number.
On the other hand, a fictitious business name can be anything you wish and is available, it can be something you came up with, your real name, or a description of your services. It can be used on the storefront, website, etc. But keep in mind that it is different from the legal name. Here is an example: James MacToole names his sole proprietorship Turtle’s Car Repairs. The name “Turtle’s Car Repairs” is a fictitious business name, not a legal name, because it does not contain the last name, “MacToole”.
You can choose any name for your business but only in addition to your name. In German, the company’s name is in colloquial German “Firmenname” or “Unternehmensname”; in legalese, the wording is “Firma”. Also, it is forbidden to call your company an incorporated company if you are not one.
Rules for finding a company name
You can use your last name and add a description characterizing your business. This description must be precise and different from other companies. Precise means that if you are dealing with pyrotechnics, you can’t operate with a name that says you are dealing with milk.
If you have a corporation, you are required to include the corporation type too, either written fully (e.g. Offene Handelsgesellschaft, Gesellschaft mit beschränkter Haftung, …) or as an abbreviation (oHG, GbR, etc.). Further rules depend on what kind of business you are running – seen from the structural side.
Name Requirements for various types of businesses
What name to use as:
Sole proprietor (Einzelunternehmer)
You must use at least your last name, and if will, a description of your business too. For example: “Jack Daniel Blotting Inks” will be fine for a sole proprietor. For the store’s sign, it will suffice to have just “Blotting Inks”.
Gesellschaft bürgerlichen Rechts or GbR
For a GbR you are required to have at least two personal names for the company.
oHG or offene Handelsgesellschaft
The open trading partnership is required to use at least one of the partner’s last names, and optionally a description.
Partnerschaftsgesellschaft or PartG
You are required to use the last name of at least one partner, the legal form (Partnerschaftsgesellschaft, Partnergesellschaft, Partnerschaft, or its abbreviation “& Partner”) and you may add a description.
GmbH
Use the family name or a fictitious business name plus “Gesellschaft mit beschränkter Haftung” or the abbreviation “GmbH” or “…Gesellschaft mbH”.
Are these rules just another case of German bureaucracy?
The law intends to provide customers with an easy way to identify the owner of a company. This way the customers can contact the company with a complaint or take legal action. But this law also protects your business. If you only used a fictitious name for your business but did not register it, you would not be able to enforce any contract you signed under your business name. This requirement is in everybody’s best interest, so we all know with whom we do business with.
Are these rules just another case of German bureaucracy?
The law intends to provide customers with an easy way to identify the owner of a company. This way the customers can contact the company with a complaint or take legal action. But this law also protects your business. If you only used a fictitious name for your business but did not register it, you would not be able to enforce any contract you signed under your business name. This requirement is in everybody’s best interest, so we all know with whom we do business with.
Determining the availability of the business name
First conduct a name and a trademark search, to ensure nobody else is using the same or a very similar name to market similar products or services. Best check the following sites/directories:
Unternehmensregister,
Handeslregister or Commercial Registry,
German Trademark Office,
Yellow Pages,
Das Telefonbuch,
Das Örtliche
Some companies also provide paper business directories that are distributed for free among households. It should be sufficient to check your city. If you live in the suburbs, check the nearest major cities too. Check at least the official registries and one or two online phone books. If you learn that your chosen name (or a very similar one) is registered as a trademark, you should not use it. This applies to corporations too – they must ensure that the business name is not conflicting with an existing corporation’s name. For finding this information, you can check the companies registry. Assuming another company has already taken the desired name, or something very similar to it, you should choose another name.
Registration of the business name
There is no special registry for business names in Germany as the law does not recognize the concept of registering a business name. Corporations have their name “registered” when you file your company’s articles of association with the Commercial Registry.
When it comes to registered merchants (“eingetragene Kaufleute”), they can only register their names. Registering your name as a trademark can give you extra protection. While it is not required, registering your name as a trademark at the Patent and Trademark Office in Munich can prevent other businesses from using a name that would likely be confused with your business name.
Obtaining the domain name for my company
Some people try to register their business’s name as a domain name and find out it is taken. In some cases, the domain remains “under construction” for months and it is unclear who the owner of the domain name is. For this scenario, there are a few options. The easiest and cheapest thing to do is try and adjust your chosen name a little. So instead of using .com with the name, could you use .org, .net, .biz or .info? The name could also be altered slightly from your exact business name. For instance, if you have a muffin store called “Franny’s” you could try frannysmuffins.com, instead of frannys.com. Maybe use a slogan or a description of your product – something like blueberryfever.com or moistandfluffy.com.
If you are a victim of “cybersquatting” (bad-faith purchasing of a domain name), the “under construction” screen could show that the purchaser has no intention of using the domain name – only selling it. In this case, you could sue the registrant in court under the rules of misusing names or use the dispute resolution procedure of the agency in charge of such things – the Internet Corporation for Assigned Names and Numbers (ICANN). The ICANN route is relatively low-cost and provides a quick process, using arbitration. You will generally have to prove that you have rights to the name and the registrant does not; and that the name was registered in bad faith. One example of bad faith is that the owner bought the name solely to sell it to the legitimate owner.
Keep in mind that there could be an innocent explanation for the “under construction” status. It is easy to register a domain but difficult to set up a website. So, try to contact the registrant first. You can find registration information at www.whois.net. Find out if there is a reasonable explanation for the use of the name and if the registrant would be willing to sell it to you. Be aware that some registrants, especially cybersquatters acting in bad faith, may supply false information about domain name ownership. In these cases, there is not much that can be done to track them down. But there are ways to wrestle a domain name from a bad faith registrant even if the identity or location of the cybersquatter is unknown.
If all these efforts don’t work out, you can hire an attorney to fight for your rights.
DISCLOSURE NOTICE: Any legal or tax advice in this communication (including any attachments) is for information purposes only and is not intended to be used, and cannot be used against Clevver or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation. Clevver does not provide any legal advice itself. Clevver works together with a network of lawyers and tax advisors that provide all necessary individual legal advice.
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