What to Do If Two Businesses Have the Same Name?

It happens frequently when two companies with the same name merge. It can be the result of coincidence or a lack of inventiveness. But what does place when there are two companies with the same name operating in the same field or region? The answer to this query is influenced by a number of variables, including the nature of the firm, the geography, and trademark regulations. Business name as opposed to trading name

Let’s first make a distinction between a business name and a trading name before getting to the core issue. The formal name of the business as it is registered with the state is known as the business name. A trading name, on the other hand, is a name that a firm uses in the course of its operations that differs from its legal name. For instance, if a business uses the name “Delicious Delights” on its menus, menu items, and marketing but is officially registered as “John’s Bakery LLC,” then “Delicious Delights” is their trading name. What Should You Do If Two Companies Share the Same Name?

Customers may become confused if two companies with the same name operate in the same field or region. If one of the companies already uses the name as a trademark, that could also cause legal problems. The best course of action in this circumstance would be to seek legal advice to ascertain whether any trademark infringements have occurred. The second business may be compelled to change its name or incorporate a geographic identifier to set it apart from the other firm if one of the businesses holds a trademark. Advantages and disadvantages of DBA A DBA (Doing Business As) registration enables companies to conduct business under a name different from their legal identity. Although DBA may appear to be a simple and economical way to run a corporation, it has drawbacks. For instance, a DBA does not shield the business owner from liabilities. This implies that the owner’s personal assets may be at stake if the company is sued. A DBA does not provide any tax advantages, and the business owner must submit a Schedule C along with their personal tax return.

Due to its liability protection and tax advantages, LLCs (Limited Liability Companies) are a common corporate form. You have a variety of options for how to pay yourself as an LLC owner, including taking a salary, getting distributions, or a mix of the two. You’ll need to set up payroll and take out payroll taxes if you decide to take a salary. When you get distributions, self-employment taxes must be paid on the earnings; however, payroll taxes are not applicable.

Finally, having two companies with the same name can cause confusion and legal problems. To ascertain whether there are any trademark infringements and take appropriate action, business owners might speak with an attorney. Due to its lack of liability protection and tax advantages, a DBA might not be the ideal choice for a firm. Last but not least, LLC owners can pay themselves in a variety of ways based on the financial health of their company.