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What's in a Name? A Short & Sweet Guide to Michigan's Entity Name Rules

 

Part 1: Introduction

You have decided to create a business entity in Michigan, congratulations!  One of the most important steps in entity formation is choosing a name—it tells the state and the public a lot about your business.  Maybe you already know what name you want to choose.  Maybe you are overwhelmed by all of the rules you have seen online.  Maybe you fall into both (or neither) of those categories.

Keep reading to learn more about what you may and must include in your business’s name, what you cannot include in your business’s name, and where to find additional resources.

Part 2: The Dos

You May. . .

            Often, the name is the first thing consumers see about a business.  Because first impressions are so important, it is a great idea for your business’s name to be a reflection of the service(s) you provide, your business’s mission, or some other related facet of your business.

For example, under § 212(c)(3) of the Michigan Nonprofit Corporation Act, “[a] charitable purpose corporation may use the word “foundation” in its corporate name.”  The word “foundation” is a restricted word, and certain § 501(c)(3) nonprofit corporations are allowed to use the word in their name.  (See Part 4 below for more information on what a restricted word is.)  Even though it is permitted in some circumstances, one thing you may want to consider if you want to include the word foundation in the name is that the common understanding of a foundation is that it distributes money for a charitable purpose.  If that is not the purpose of this organization, it may create a misleading public perception that your organization makes grants to other organizations.

You Must. . .

            Sole proprietorships must operate under the name of the owner, unless the owner has filed a Doing Business As (DBA) form with the county in which the business operates.

            Partnerships must operate under the names of all of the partners, unless they have filed a DBA form with the county in which the business operates.

Subchapter C and Subchapter S corporations must have one of the following words or abbreviations in their name: Corporation, Incorporated, Company, Limited, Corp., Inc., Co., or Ltd.

Limited Liability Companies must have one of the following words or abbreviations in their name: Limited Liability Company, LLC, L.L.C., LC, or L.C.

Cooperatives must follow the rules for whichever entity type they choose, and may only include “Cooperative” in their name if they are formed under the Michigan for-profit or non-profit corporation cooperative statute.

Part 3: The Don’ts

            Regardless of which type of entity you choose, the name cannot be confusingly similar to other filed business names of any type.  Punctuation and required words, like LLC and Inc,. are ignored when determining if the name is available.  Therefore, if the name “Romeo & Juliet LLC” is already taken, it would not be sufficient to name your entity “Romeo & Juliet, Inc.” in an attempt to distinguish it.  You might, however, be able to use “Romeo & Juliet: Star-Crossed Lovers.”

You should be aware that if your name is available to use for your business or organization in the State of Michigan, it may not be available to use as a trademark or service mark for your business or organization.  A great place to check is with the U.S. Patent and Trademark Office Database, which can be found here.

            The name also cannot imply or state that the entity (1) is a different type than what it actually is or (2) has a different purpose than the one included in the formation documents you file.  For example, you cannot include a designation such as “LLC” in your business name if you are creating a C-Corporation.

Part 4: Additional Resources

How do you check to see if your name is available?  Fortunately, the MI Department of Licensing and Regulatory Affairs (LARA) has an entity name search function you can use.

First, go to the business entity search page.


Next, enter the name you would like to search in the “Entity Name” field and hit “Search” at the bottom of the page.

Finally, review the results, keeping in mind that not every result that appears is an entity in good standing, so you might still be able to use the name.


Additionally, since it can take 10 days for LARA to process a filing, a name might appear to be available when really it is not.  If you are particularly tied to a name, it might be a good idea to consider reserving it.  More information on name reservation can be found here.

LARA has published a guide for choosing a corporate name.  The guide also links to statutes that govern name selection—we highly suggest that you review the relevant statute carefully.

The LARA restricted word list provides further clarification.  A LARA publication that details common reasons articles are rejected explains that there are three types of words on the list: cautions, restrictions, and prohibitions.  Restricted and caution words require approval from another agency, special licensing, or adherence to certain statutory requirements.  Prohibited words are (unsurprisingly) not allowed at all.

Hopefully this has provided a good starting point for you as you select your business’s name.  Good luck with creating your business entity!


By: Liv Torres

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