Choosing a Business Name

What issues should I keep in mind when picking a name for my business?

No doubt you will spend hours brainstorming for a business name that represents your products or services – a name that is both marketable and infused with personality. To help the creative process along, you might surf the Web, browse the dictionary, read trade magazines, and bounce ideas off of friends and colleagues. But as you hunt for the perfect name, keep three main questions in mind:

  • Will your business name receive trademark protection?
  • Is your proposed business name available?
  • If your business will have a website, is a similar domain name available?
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What is the best type of name for my business?

There is no one-size-fits-all formula for picking a great business name. The best name depends on a host of considerations – some as obvious as the kind of business you do, others as unique as your own tastes and style. There are, however, a few guidelines that will steer you in the right direction. A good business name should:

  • be distinctive, be memorable, be easily spelled, and be easily pronounced,
  • suggest the products or services you offer,
    and
  • distinguish your name from your competitors.
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I have decided to open a store to refill ink cartridges for printers. My company’s name is to be “Blotting Inks Inc.” Any objections?

Yes, several. Generally, you can choose any name you wish but only in addition to your personal name. In German, the company’s name is in colloquial German “Firmenname” or “Unternehmensname”; in legalese the wording is “Firma”. (N.B. the German word for "company" is also “Firma”. No need at all to be embarrassed if you do not get it legalistically correct, also lawyers mix it up…) Also it is forbidden to call your company an incorporated company if you are not one.
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What is the "legal name (= Firma)" of my business?

The legal name of a business is the official name of the person or entity that owns a business. If you are the only owner of your business, then its legal name is simply your full name. If your business is a partnership, and you have a written partnership agreement that gives a name to the partnership, then that name is the legal name of the business. Otherwise, the legal name of a partnership consists of the last names of the owners. For corporations, the legal name of the business is the name registered with the company's registry. Your business's legal name will be required on all government forms and applications, and is particularly important to use on your application for a federal employer identification number.
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What is a fictitious business name?

The term "fictitious business name" (or "Sachfirma"in German legalese) is used when a business uses a name that is different from its legal name. For instance, if James MacToole names his sole proprietorship Turtle's Car Repairs, the name "Turtle's Car Repairs" is a fictitious business name because it does not contain Jame's last name, "MacToole." A fictitious business name can be any combination of a phantasy name, your real name, or a description of your name.
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So, what are the rules for finding a company’s name?

You can use your personal last name. You can add a description characterizing your business. This description must be clear, true, and not be mistakable with other companies (§§17, 18 HGB). If you have a corporation, you are required to use either that corporation’s name in full (offene Handelsgesellschaft, Gesellschaft mit beschränkter Haftung i.a.) or its abbreviation (oHG, GbR, etc.). “True” is to tell you here that if you are dealing with firecrackers you may not show that you are dealing with milk. Further rules depend on what kind of business you are running – seen from the structural side.
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What may I use as a company’s name for a sole proprietor (Einzelunternehmer)?

You must use your name, i.e. at least your last name and if you wish also a description of your business. Coming back to your previous wish: “Jack Daniel Blotting Ink” will be fine for a sole proprietor. For the store’s sign it will suffice to have just “Blotting Inks”.
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What are the rules for a Gesellschaft bürgerlichen Rechts or GbR?

If you have a GbR, then you are required to have at least two personal names for the company.
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How may I describe my oHG or offene Handelsgesellschaft?

This open trading partnership is to use at least one of the partner’s last name and may add a description (§19 II HGB).
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Which name is good for a Partnerschaftsgesellschaft or PartG?

You are to use the last name of at least one partner, legal form (Partnerschaftsgesellschaft, Partnergesellschaft, Partnerschaft, or its abbreviation “& Partner”) and you may add a description.
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What is good for a GmbH?

You either use your family name or a fictitious business name plus "Gesellschaft mit beschränkter Haftung" or a commonly understand abbreviation like "GmbH" or "...gesellschaft mbH".
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What’s the idea behind these company’s name? I don’t want to show everybody, who’s the owner. That’s none of their business. Is not it just another way of German bureaucracy?

The law wants business names to give customers a quick way to determine the owner of a company, so they can contact her with a complaint or take legal action against her. But it is not just about complaining customers. If you used a fictitious name for your business but did not register it, you yourself could get the raw end of some deals: You would not be able to enforce any contract you signed under your business name. This requirement is in your own best interest, so do not be tempted to shrug it off. Sorry, for your need of privacy but your wish is illegal. The idea behind this is that everybody can know with whom he or she is making business.
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A friend of mine offering a professional services was ordered by the tax office to also submit a tax return for trade tax. His company’s description told the authority, he was running a trade and not only a professional business. I thought he is subject to that tax also. What went wrong?

It can be that your friend just picked a wrong description for the company. The tax authorities have processed in court hundreds of precedents on what is a professional service and what a trade. IT-consultants, for example, offer without question professional services but if such person puts on his sign “Computer Consultation (= EDV Beratung)” this remains vague. In doubt, the tax office will consider this as a trade with all fiscal consequences.
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Is there anything he can do about it?

Sure! He has to argue with the tax office and prove that he really only has a professional service. N.B such arguing is not illegal even if it means that you are trying to reduce your taxation. It is your right to construct your legal circumstances to avoid higher taxation. Do not even think you might be able to do this yourself. Prior legal advice would have saved not also a lot of money but also much stress.
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How do I find out if the business name I want is available?

You will have to conduct a name and trademark search to make sure no one else is using the name you want to use (or a very similar name) to market similar products or services. Best check following sites / directories:

  1. Unternehmensregister,
  2. Handeslregister or Commercial Registry,
  3. German Trademark Office,
  4. Yellow Pages,
  5. Das Telefonbuch,
  6. Das Örtliche

Some companies also provide paper business directories that are distributed for free among households. It should be sufficient to check your city. If you live in the suburbs also check that major city, too. If you find that your chosen name (or a very similar one) is registered as a trademark, you should not use it. If you are organizing your business as a corporation, you must also make sure your business name is not the same as that of an existing corporation. You can check the company's registry to find out for corporations. For further details to the history, check out the article "Company Information on the Internet Starting 2007 ". Supposing somebody else has already taken your designated name or it is very similar, you will have to choose another.
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How intensively do I have to research?

Good question. Generally, the more the better. Taking it practically, I suggest as a minimum that you check the official registries (1 and 2 – above list) and one or online phone books (no. 4 ff. of above list). N.B. Do not waste your time trying to follow many other online directories. Very often, they are just a spin off from the mother companies (Das Telefonbuch, Das Örtliche, Gelbe Seiten).
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Do I have to register my business name?

Generally, there is no special registry for business names in Germany. The law does not recognize the concept of registering a business name. Corporations have their name "registered" when you file your company's articles of association with the Commercial Registry. Registered tradespersons ("eingetragene Kaufleute") only have to possibility to register themselves or their name. You may also want to take advantage of the extra protection that registering your name as a trademark can give you. While it is not required, registering your name as a trademark at the Patent and Trademark Office in Munich, it can prevent even more other businesses from using a name that is likely to be confused with your business name.
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Can I change my business name to include "GmbH" or "& Partners"?

Some people confuse choosing a business name with choosing a type of ownership structure, such as a corporation. But you cannot just tack "GmbH" or "& Partners" onto the end of your business name and start calling yourself a corporation or so.
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I am hoping to start a website, to bring people to my stores. I just tried to register my business' name as a domain name but found it was taken. When I type in the address, though, the screen says "under construction." It is been "under construction" for months. What should I do?

You have a few options. The easiest and cheapest thing to do is try and wiggle your chosen name a little bit. If you are using .com with the name, could you use .org, .net, .biz or .info? Or, could you vary the name slightly from your exact business name? For instance, if you have a muffin store called "Franny's" you could try frannysmuffins.com, instead of frannys.com. Or, try a whole different name. Maybe use a slogan or a description of your product – something like blueberryfever.com or moistandfluffy.com. There is a chance that you are a victim of "cybersquatting", the bad-faith purchasing of a domain name. The "under construction" screen could show that the purchaser has no intention of using the domain name – only of selling it back to you. In this case, you could sue the registrant in court under the rules of misusing names or use the dispute resolution procedure of the agency in charge of such things – the Internet Corporation for Assigned Names and Numbers (ICANN). The ICANN route is a relatively low-cost and quick process, using arbitration. In either case, you will generally have to show that you have rights in the name, that the registrant does not have rights in the name, and that the name was registered in bad faith. One example of bad faith is that the owner bought the name solely for the purpose of selling it to the legitimate owner.
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Okay, so I found the person holding the domain. Now what? Can I immediately sue him?

Before filing a complaint in court, though, you should look into the situation. There could be an innocent explanation for the "under construction" status. It is easy to register a domain but difficult to get a site up and running. Try contacting the registrant. You can find registration information at www.whois.net. Find out if there is a reasonable explanation for the use of the name and if the registrant would be willing to sell it to you. Be aware that some registrants, especially cybersquatters acting in bad faith, may supply false information about domain name ownership. In these cases, there is not much that can be done to track them down. But there are ways to wrestle a domain name from a bad faith registrant even if the identity or location of the cybersquatter is unknown. If all these efforts were in vain, then latest hire an attorney to fight for your rights.
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Examples of Valid Company’s Names

Examples

Business

Bill Gates

Sole proprietor

David Danneman’s House of Puff

Sole proprietor

Macrohard GmbH

Corporation (GmbH)

Mickey & Minnie Mouse Dairy GbR

GbR or oHG (private partnership)

Schlafgesellschaft mbH

Corporation (GmbH)

Wheeling and Dealing Aktiengesellschaft

Corporation (joint-stock corporation)

Goofy & Partner Attorneys PartG

Partnership company

Batmann Protection oHG

oHG (commercial private partnership)