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Texas LLC Name Rules

 

 

Texas is one of the more onerous states when it comes to determining whether a proposed name for a Texas limited liability company will be accepted as part of a new filing.

 

As a result, name issues are the biggest reason new LLC filings are rejected at the state level and these same issues cause a lot of disagreements and contention between new business owners and the State.

 

The Secretary of State is required to apply a set of conditions and rules in determining whether a name is available and some of these rules rely on the "discretion" of the examiner reviewing the filing.  In summary, this means that there never can be 100% certainty that your proposed Texas LLC name will be accepted until your filing has been completely processed.

 

Still, it should be helpful to know the general requirements.  This Article explains:

 

Section 5.053 of the Texas Business Organizations Code sets forth the general standards for name availability, namely, that a filing entity may not have a name that is the same as, or that the secretary of state determines to be deceptively similar or similar to a name of another existing filing entity or an entity name that is reserved or registered with the secretary of state.

 

In addition to the laws, the State also has imposed a set of administrative rules used to determine the availability of entity names (these are contained in ยงยง79.30-79.54 of Title 1, Part Four of the Texas Administrative Code).

 

Four Determinations for a Proposed LLC Name

 

1. The name is the same as another name on file.  This determination results in the name not being available and the proposed business must supply another name choice.

 

2. The name is "deceptively similar" to another name on file.  This determination means that he proposed name may tend to mislead as to the identity or affiliation of the entity.  This determination results in the name not being available and the proposed business must supply another name choice.

 

3. The name is "similar" to another name on file.  With this determination, the proposed business owner has the option of obtaining a Letter of Consent from the owner of the similar business name.  If a Letter of Consent is obtained, then the new name which is similar to an existing name may be used. 

 

Practically, this is a time consuming process and more often than not another business owner will not provide a Letter of Consent for fear of association with his/her business.  The better option here is for the new business owner to come up with another name.

 

4.  The name is available.

 

 

Texas' Peculiar Name Rules

 

Texas is very strict about applying certain rules and conditions and these rules make many names not available when they would otherwise be available in other states.  Given the large number of corporation and Texas LLC filings and entities, the choice of a name can be a challenging step.

 

Here are some key rules to be aware of:

 

(1)     The proposed name is the same as or deceptively similar to another name except for a geographical designation at the end of the name;

 

(2)     The first two words of the proposed name are the same as or deceptively similar to another name and those words are not frequently used in combination;

 

(3)     The proposed name is the same as or deceptively similar to another name except for a numerical expression that implies that the proposed name is an affiliate or in a series with another entity;

 

(4)     The proposed name uses the same words as another name but the words are in a different order in the names;

 

(5)     The proposed name is the same as or deceptively similar to another name except for an Internet locator designation at the end or at the beginning of the name (e.g., www., .com, .org., net); or

 

(6)     The difference in names consists of words or contractions of words that are derived from the same root word and there is no other distinguishing word in the name.

 

These are situations which will raise red flags with the State and usually will result in a rejection and/or a requirement that a Letter of Consent be obtained from the other entity.

 

Texas Business Formation offers one free Texas LLC Name Search.  Click Here to Submit.

 

Speed up your LLC Formation by purchasing our Texas LLC Formation Service.

Our LLC formation customers have their name choices checked first prior to our free name search submissions. Our LLC formation customers get a dedicated customer representative who will check their proposed names and if necessary, will work with them until an acceptable name is confirmed with the State.  Click here to learn more about our services to Form a Texas LLC

 

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