A company's legal name is a unique identifier that allows the government and the public to recognize the parties responsible for business actions. It can be difficult to determine the availability of a name that has been effectively abandoned by a company. Each state has its own procedures for determining if a name can be considered abandoned, and whether a different company can use it.
Every state business statute allows a company to transfer a reserved business name to another entity by documenting the transfer in writing. Assuming you can locate a responsible party, if an operating or non-operating company has a reserved business name that it no longer plans to use, you can negotiate with the owners for the transfer of the name. Submit proof of the agreement to the state's business registrar when you file your company's formation document. A written statement of permission from a past owner of record would also likely be enough for you to use an abandoned business name in most states if the target company has gone out of business.
The state is responsible for checking the availability of a business name that a new entity wants to use. If you have determined that a targeted business name is no longer in use because the name has been abandoned by its owners, you can submit the formation document for your new business using the name and let the state tell you if it is not available. If the abandoned name was ever registered with the state, it will be listed in the state's entity database. The company that used the abandoned name might typically be listed as inactive or dissolved. If the company is listed as inactive, the state may not allow you to assume the name. If it is listed as dissolved, the name is likely to be available. Many states impose a waiting period before the names of inactive or dissolved companies can be used by other entities; state law often allows companies to be reactivated within a certain time period.
The laws in most states require businesses that plan to stop operating to officially cancel its assumed name registration, also known as a fictitious business name registration or a "doing business as." This is an alias that the business uses instead of its legal name. To cancel this registration, the business owner submits a form to the state agency or local county clerk's office that registered the name. If a cancellation is on file, you merely need to submit a name registration to reserve the name for your own use.
An abandoned company name may be available for you to use, but it is not always advisable to do so. The owners of an abandoned company may have trademarked its name with other states or the federal government. Even if the name is available for use within your state, you may encounter legal problems if you try to use the name elsewhere. Your best option is to negotiate with for the full, worldwide rights to the name. If you cannot find a person to give you permission to use the name in writing, you probably should consider using a different name that has no potential encumbrances.
- American Bar Association: Revised Model Business Corporations Act
- Yolo County Clerk: Statement of Abandonment of Use of a Fictitious Business Name
- Kentucky Secretary of State: Frequently Asked Questions
- Citizen Media Law Project: Choosing and Checking the Availability of a Business Name
- FindLaw: Make Sure Your Proposed Business Name Is Available
Terry Masters has been writing for law firms, corporations and nonprofit organizations since 1995, specializing in business topics, personal finance, taxation, nonprofit issues, and general legal and marketing content creation for the Internet. Terry holds a Juris Doctor and a Bachelor of Science in business administration with a minor in finance.