Legal entity name rules vary widely from state to state, especially when potential business names venture toward the obscene and profane.
If you are looking to use a more ‘exotic’ business name, there are additional entity name requirements to navigate in order to avoid mortally offending any state filing offices and having to file all over again.
Legal Entity Names Should Not Imply Illegal Activity
While not enforced uniformly, the majority of U.S. states prohibit names indicating illegality or an illegal act as the core of an entity’s business.
Easy, right? Not so fast. Filings with spelling errors that take an otherwise innocuous entity name into questionable territory might also be rejected due to this general principle.
For a more PG example, let’s say a planned local neighborhood hardware store filed ‘Grab a Wench, LLC’ for its entity name instead of the more socially acceptable and business-relevant ‘Grab a Wrench, LLC’. The submission would almost certainly be rejected by the state, either by a computer with a built in ‘smut dictionary’ that flags filings for manual review or by an otherwise unamused filing officer.
How States Regulate Entity Names
Beyond implied illegality, state approaches to governing acceptable business names fall roughly into three categories:
- (Almost) No Holds Barred
In ministerial jurisdictions like Arkansas, Virginia, Oregon and Washington D.C., a filing may be accepted as long as name distinguishability requirements are met and all required information is filled in. The filer will not be notified if there are any other legal deficiencies, meaning the entity can wallow in a state of potential uncertainty because it was not formed correctly.
- Codified Restrictions
Other jurisdictions have formal regulations regarding entity names. In states with statutory rules, like Louisiana, Maine, New York and Texas, naming regulations can almost always be found online and up-to-date, and are only likely to change during the jurisdiction’s legislative session. In administrative regulation jurisdictions like Idaho, Michigan and Montana, regulations can change more frequently (in some cases, monthly). Statutory language is generally more exact and allows for less discretion in decisions made by filing officers, while administrative rules tend to reflect the attitude of the incumbent administration.
- Jurisdictional Discretion
In states like Alaska, Ohio and Nevada, entity naming guidelines are determined by state administrative or agency practices. These ‘rules’ are not officially published and as a result, can be difficult to ascertain. In some states, limited written guidance may be available online, usually on a Secretary of State website.
Common Entity Name ‘Restrictions’
There are three flavors of entity name restrictions that states tend to use. Even if referenced directly in state statutes or state administrative code, these ‘rules’ still leave latitude for interpretation:
Defined roughly by Miller v. California as offensive terms relating to bodily functions that hold no other literary, artistic, political or scientific value, the best practical interpretation is from Justice Potter Stewart’s famous remark on the case:
“I can’t define it, but I know it when I see it.”
Louisiana and Maine statutes include obscenity as a basis for entity naming restrictions.
Multiple states use this standard in determining whether an entity name is acceptable but like obscenity, it remains largely ambiguous:
“The entity name may not be one that is deemed to be so grossly offensive as to be unacceptable as an entity name”. 1 Texas Admin. Code § 79.36
Idaho and Nebraska also use the term as a deciding factor in their policies and rules.
Discrimination and/or Defamation
States like Ohio and New York reject entity names for being discriminatory or defamatory. Consider reviewing the local jurisdiction’s employment anti-discrimination laws and federally protected classes for additional guidance of how this may be determined.
Keep in mind that while you may land on an entity name that meets the guidelines where it is formed, filing issues may well arise when you try to qualify in other states that have different naming requirements regarding unsuitable language. In that case, the entity would be forced to adopt a compliant assumed name or alias.
If You Aren’t Sure, Ask!
If you’re still in doubt as to the validity of an entity name, you can always contact your local jurisdiction’s filing office with (tactfully-phrased) questions.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.