Selecting a Business Entity in California

Things just got a bit easier for people who want to register a business in California. There are new regulations to help in the selection of names for a business entity.

Choosing a business entity is difficult enough as it is and the choices include an LLC, partnership, corporation, etc. Choosing a name for the business, while exciting and challenging, is even more difficult if the rules laid out by the Secretary of State (SOS) are not followed.

It would behoove those who are serious about launching a business that requires filing with the California SOS to do some homework and check the newest changes to the regulations before picking a company name and finding out it is not acceptable.

This isn’t an easy process and when a company is launched, the choosing of a name is a critical part of the whole process of being a “business.” In addition, the choice of entity and its name may have long-term tax and economic ramifications, respectively. “This is one of the major reasons speaking to a Los Angeles business attorney familiar with the SOS guidelines will assist a serious entrepreneur in ‘getting it right’ the first time when they go to register,” outlined Alan Insul, a noted Los Angeles business attorney with years of corporate experience behind him.

Perhaps the most important section that business entrepreneurs want to pay attention to is the “same or deceptively familiar names” section. In essence, it makes reference to the fact that if a name being proposed for filing with the SOS is highly similar to one that already exists, that name will be declined.

The name is too close to being the same if the name being suggested and an existing name are identical; if the differences between the suggested name and one that already is in existence merely rest on differences in use of letters and other graphical touches, or if the difference boils down to the presence or absence of a business entity ending. The SOS regulations provide good examples of what to avoid when choosing an entity name.

As with many areas of law, there are exceptions to virtually every regulation and it only makes sense to speak with a Los Angeles business attorney to get the full sense of how the regulations affect the launch of a proposed business. “In the meantime, it’s a good idea to do some pre-launch research to find out what pitfalls to avoid,” said Insul.

One other place a serious business entrepreneur may find solid information backed by years of experience is Chapter 3 in the 2009 edition of Selecting and Forming Business Entities. The two volumes will be available soon and also have a forms CD included. Respected Los Angeles business attorney, Alan Insul, authored Chapters 3 and 7 in this year’s edition. The material is specifically designed for California business lawyers working with their clients to help them choose the “best” entity for their business.

To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.

The content contained within this feature is not intended as legal advice and does not constitute an attorney-client relationship.