This is Rick Fair with the Fair Law Group, PLLC. I’m an attorney that focuses primarily on Texas business entity formation such as the LLC and the Texas Series LLC. Today, I want to do a quick video talking about what is the best way to go about searching for an LLC name. Say you want to start a new Texas LLC and you’re trying to figure out what name you can use. Well, we’re going to show a way to do that. What I’ve pulled up here is the Texas Comptroller’s website.
So, the first thing you do is go to comptroller.texas.gov and this is what you’ll see when you pulled up the site, at least right now in September 2020. So, we go down to the Business Center and you’ll see this link right here for Franchise Tax Account Status. And, when we click on that link, it’ll take us to a page that looks like this. On this page, you can search by a Tax ID if you know a company you’re looking for, entity name (which is generally the best way to look up a name), or file number if you’ve actually looked at the Texas Secretary of State’s website. But, if you’re just tossing around names and trying to figure out a good starting point to see what you can and can’t use, searching by entity name is best.
One important caveat though is the Texas Comptroller of Public Accounts records are pulled pretty frequently from the Texas Secretary of State. I don’t know exactly what the time period is, but I think it’s somewhere in the range of two to three days after an LLC is formed with the Texas Secretary of State, they’re sent a Certificate of Filing, and it usually gets over to the Texas Comptroller of Public Accounts. So, let’s say that you’re starting a plumbing company and you want to be ABC Plumbing. Well, let’s say somebody filed an LLC for ABC Plumbing two or three days before you did and you went here to the Texas Comptroller of Public Account’s site, checked it out, and said, well, okay, that name’s not taken. If you go ahead and file an LLC, then you’re probably going to get a rejection because, in the meantime before the records updated between the Texas Secretary of State and the Texas Comptroller, the other filed the LLC.
So, it’s best to use the site I’m showing you right here to start preliminary searching and then when you really want to narrow down the names you want to use, it’s best to check with the Texas Secretary of State or hire an attorney to do a name search for you. There’s another couple reasons why it’s probably god to hire an attorney, especially if you’re going to be doing business on a fairly large scale because there’s potential for trademark issues.
So, let’s say you want to make an LLC for ABC Plumbing, so I went ahead and pulled it up here, so when you type in “ABC Plumbing” here, check you’re not a robot, and click search; this is what you’re gonna pop up with right there. You’re gonna pop up with the search results that say, okay, we’ve got two hits for ABC Plumbing. So, we have ABC Plumbing, Inc. (it’s a Texas corporation) and ABC Plumbing Repair, Inc. So, right off the bat, if you’re wanting ABC Plumbing, well, you’re going to have problems and I’m going to talk more about this in another video, but I’ll give you a brief idea of why trying to register ABC Plumbing, LLC is not a good idea.
The Texas Secretary of State has a bunch of rules guiding what names can be chosen and one issue that they have in particular, and this is the same as you see with federal trademarks, is the idea of names that are deceptively similar to another name. So, what do we mean? Okay, well, I made a list here. We’re trying to register ABC Plumbing, LLC, but we’ve already got ABC Plumbing, Inc. The Texas Secretary of State says that any of entity name that has the same or similar name, it doesn’t matter if they spell out “limited liability company,” “incorporated,” or use the “LLC” designator. The fact remains that the “ABC Plumbing” is still the same name, so the Texas Secretary of State won’t let you register it because “ABC Plumbing” is still the same, regardless if you’ve got an “LLC” at the end, “Limited Liability Company” at the end, or “Inc.” at the end.
Well, what if you want to be creative and use “A/B/C Plumbing, LLC.” Once again, the Texas Secretary of State will say that’s deceptively similar because all you’re basically doing is using slashes, or in this case like my other example here, periods, or you could have another one where you try “A B C Plumbing” like this. Still, all of these yield the same result. You won’t be able to register it because the Texas Secretary of State will say it is deceptively similar to “ABC Plumbing, Inc” because all you’re doing is changing spaces, adding periods, or adding slashes. It’s essentially the same name.
Now, the last example is sort of an odd one. Let’s say you’re trying to register “ABC Plumbing” and you think, well, I’ll just put “Southwest” after it because my business in the southwest part of Texas. Well, the Texas Secretary of State has a catch-all or that where you have to go get notarized consent from the old “ABC Plumbing, Inc.” A lot of people probably think that’s kind of stupid, but I think the Texas Secretary of State is thinking you’ve already got “ABC Plumbing, Inc.” registered and you’ve got another person just tagging this geographic designator on there. And, there’s a lot of companies that, with parent-child relationships, where you have “ABC Plumbing” and then they have a lot of other LLCs under where they may have “ABC Plumbing Dallas,” “ABC Plumbing Houston,” “ABC Plumbing North;” you can go on and on trying to think of all the permutations of this, but at the end of the day, we’ve still got this here and all we’re changing is just adding a geographic designator. So, the Texas Secretary of State thinks that it’s best to go ahead and have an extra step there to get permission, so what you have to do in this case if you want to use a name like “ABC Plumbing Southwest” is go get notarized permission from the original incorporated company (ABC Plumbing, Inc.).
What’s interesting about this is, in a lot of cases, we have clients, especially in the real estate context, that’ll have something like “ROI Holdings I,” “ROI Holdings II,” and “ROI Holdings III.” And, all they’re doing is adding a number after the name. I had a client, I believe it was last year, that was similar to this situation. I called up the Texas Secretary of State and I said, these companies have the same ownership and there’s really no different people involved with this, so do I need to still get notarized consent from my client to be able to register this name? And, the Texas Secretary of State said yep, you do. So, even if you have a company where all you’re doing is making another spin-off LLC for, be it property management or whatever, if you’re going to use a name that’s basically the same, but then just adding something after it, you’re going to have to get notarized permission, even if you’re the same person apparently.
So, that’s all I wanted to talk about today. If you ever have any questions about LLCs, setting up Series LLCs, or any sort of business entity questions, feel free to give us a call. Our information is below the video here and we’d be happy to help you in any way possible. Have a good day.