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How do you name your limited liability company? Your LLC?
We’re going to give you tool to help you name your LLC quickly and easily…for free. Then we’re going to give you some rules to follow and things to avoid. LLC asset protection and tax benefits are tremendous. But in order to form an LLC, you first need to come up with a name.
That’s what we’re going to talk about in this article. We have helped our clients name thousands of LLCs and some people can come up with a name right off the top of their heads. Others want to head scratch. “I don’t know.” “I have to talk with such and such first.”
So we’re going to show you a surefire method to choose a name quickly and easily.
Now, there are two categories of company names that come to mind. One is where the name really doesn’t matter much such as using a company to own a rental property. We talk to most of our real estate investor clients about putting each property into a separate LLC. That way, a lawsuit on one property doesn’t create the domino effect. In that case we simply have them name the LLC as the address of the property. The 123 Main Street LLC for example.
We had this one guy who was setting up multiple LLCs for rental properties. They head scratched and worried and pondered. This went on for a couple of months. Finally, the guy rear ended someone’s car,. He just smashed into the back of the guy on the highway. That car hit another, which hit another. We think there were seven cars altogether.
He was sued for way more than his insurance would cover. So, they guy went months without putting his properties into LLCs because of the names. The guy was at fault in the car wreck. He was a wealthy real estate investor. So, though there were multiple people in the car wreck, he was the one with the $110,000 BMW 750 with all the options. So guess who everyone sued? Right, the rich guy.
All of a sudden he was panicked about getting the LLCs formed. There were some other strategies we could employ to protect the properties but they would have to defend these strategies in court rather than having the protection automatic because they should have been in LLCs.
That is, the guy could have protected everything. But he dilly dallied too long on picking the company names.
For most businesses and real estate holdings, for privacy and protection, we don’t recommend people use their own names in the name of the LLC. Maybe if it’s a construction business or a business where using your name makes sense, then okay. Anderson Construction might be perfectly fine if you’re Bob Anderson. But for holding real estate or trying to keep your ownership private don’t use your name on the company. But don’t name it Bob Anderson LLC if you are using it to own real estate. You want more privacy than that so you don’t paint a target on your back.
When you use an LLC for protective purposes; to hold your stock market portfolio or hold business equipment, real estate as we said don’t use your name. See our video called Anonymous LLC and I think you’ll really like some of the ideas we have there on owning your LLC privately.
Another mistake people make is using one-word names, common names. Then we go to do a name availability search and it’s not available. This is especially true in larger states such as California, Texas, Florida and New York. The same is true in popular states for LLCs such as Nevada, Delaware and Wyoming. So, common words such as Cornerstone. Cornerstone, LLC or in Texas just about anything with the word Lonestar is taken. Lonestar Enterprises, LLC, you can forget it in Texas. In California, Golden State with just about any other common word like Enterprises or Ventures is gone.
Initials are often taken. ABC Enterprises. J&J Holdings, for example. So, what we recommend for name availability purposes is having more than one word. That is, use one word unless the word is a totally made up word such as Polywave or Venstar or Capmax.
So, here we go. Here is a surefire way to come up with a name for your company. See down below. You can use this tool to generate a name for your LLC. Okay, so here comes the shameless plug. We’re in we’re in the business of setting up LLCs. Our company was established in 1906 and we have attorney on staff. So, if you want your LLC set up right so you’re more likely for it to protect you from lawsuits when you need it, feel free to call us to have us set up your LLC the right. We provide proper articles, a proper operating agreement, membership certificates and everything you need. See our number and free consultation form on this page.
|FIRST WORD||SECOND WORD||IDENTIFIER|
|Brightstar||Holdings||Limited Liability Company|
So with this list, you’ll pick a first word such as Metro. Then you choose a word from the second list such as Endeavors. Then you pick your identifier that notifies the world that it’s an LLC and not another type of business entity. So you end up with Metro Endeavors, LLC. Or Capstone Enterprises, Limited Liability Company. Northern Ventures LLC, etc.
By the way, suppose someone has Skydiving LLC registered in a particular state. You won’t be able to register Skydiving Limited Liability Company in that same state. The company identifier doesn’t distinguish two companies with the same base name.
So you can feel free to use this list and it will give you at least 626 different name choices. Or you can choose your own first word and add one of our second words. Thus, the name choices are practically infinite.
So, that should help you pick a name and pick one rapidly.
Here are some other very important things to consider.
Many people are not too creative. They come up with a word or phrase they like such as Blue Sky. So, it’s Blue Sky Enterprises, LLC. Then they call us down the line and want Blue Sky Enterprises 2, LLC, Blue Sky Enterprises 3, LLC etc. So, they have us set up multiple LLCs with Blue Sky Enterprises in the name.
But really think about it. If you want anonymity, why flag the world that all of these companies are linked to each other? Otherwise you’re giving a pretty good clue that all of these LLCs are owned by the same person. Hey, there’s not a whole lot of thought that has to go into figuring that out. Anybody would draw that conclusion, wouldn’t you?
So, for anonymity you’ll want to refrain from using a naming pattern where people could easily recognize the LLCs are tied to each other. Like a friend of ours who insisted on using his last name in every company. The building inspector found some problems in one building. Then all of a sudden that same inspector is slapping all kinds of violation orders on all of his other properties.
But it’s more than that. You’re talking with your bookkeeper or CPA. They say Blue Sky. Well which Blue Sky? Blue Sky 1? Blue Sky 4? Which one? So, when talking to people, having the names too similar will confuse people as to which one you’re referring to. And not only will it confuse them but it’ll confuse you, too. We’re talking from experience. We’ve done it and we’ll never do it again because of all the confusion it created. So, in naming your LLC, use distinct and different names. Again, if the LLC owns real estate we suggest naming the company the street address of the property.
What we do for most clients is first we set up a land trust that owns the property. That gives an additional layer of privacy of ownership. It also makes the property easy to sell without changing the title. This is because you can just assign the beneficial interest to your new buyer. You can usually do this without paying the bucket of blood fees to the county when you sell a property.
We use the same convention here. 123 Main Street Trust. Then we have the LLC own the land trust. Okay, technically speaking we make the LLC the beneficiary of the land trust. 123 Main Street LLC, for example. So, the land trust provides privacy of ownership and ease of transferability. Plus, you can save you a ton of money in property transfer fees. Then LLC provides lawsuit protection and asset protection.
If you already own a property it is quite easy. You just call us up and have us name the LLC the address of the property.
If you’re closing on a new property, you either simply buy it. Many lenders want you to close in your own name. (Though some lenders will allow you to close the loan in an LLC or land trust.) Then right after closing, you put the property into a land trust. 456 Maple Street Trust. You can then make the beneficiary of that land trust an LLC, the 456 Maple Street LLC.
Why not just put it straight into the LLC? If you own the property in your own name, the bank could invoke the due on sale clause if you do. But putting it into a land trust with you as the beneficiary, the Garn St. Germain Depository Institutions Act of 1982 doesn’t let the lender call the loan due. So, though we know this is correct, covering our backsides, we have to say to ask a lawyer first. We do have lawyers on staff here at our company who you can call and speak with right now if it’s during business hours. Alternatively, you can fill out a free consultation form on our website to set up land trusts and LLCs if you desire.
If I buy properties in different states we’d also put GA for Georgia. FL for Florida. NV for Nevada. So, 456 Maple Street GA LLC. That way you know it’s your Georgia LLC so you know which state you’re talking about.
So, that way if you have properties in different states and you have several LLCs, it’s easy to remember the state where that property is located. Back in the early 2000s our CEO had over 50 different properties and construction projects going at the same time.. They were in in different states such as Washington State, California, Michigan and Florida.
It’s hard to keep track of everything. So, using the addresses and the state abbreviations helps you put each property in the proper mental slot. Furthermore, it makes it easier to communicate with others such as your CPA, contractors, tenants, etc. Then you can have one central LLC that doesn’t own any property that collects all the rents from all of your properties. That way you keep it simple.
Okay, so what about when you want to buy properties but you don’t know where yet. Maybe you know the state but you don’t have the address yet because you haven’t gotten the offer accepted. Say you want a couple of LLCs sitting around that you can use to make offers so you have the legal protection or that you’ll use as soon as the property closes you can put it right into the land trust and have that LLC waiting in the wings so it can be the beneficiary of the land trust. See our video on land trusts for owning real estate.
Some states take a while to form an LLC, such as California; maybe a few weeks. Rush filings may be a bit faster. But in Wyoming we can set up an LLC for you in a few minutes. But we wouldn’t make the offer in an LLC that is named after the address of the property. It would certainly look suspicious to a seller. Plus it shows that you’ve already made too much of a commitment by forming a company with that address in the name. So, it might hurt your negotiation power because they might think you’re too committed to walk away. Therefore, don’t name the LLC the address of the property before the seller actually accepts your offer.
So, we would come up with a name that might tell you something about the city or the area but not the address. Say you plan to invest in South Miami. You might call it Prime Properties of South Miami LLC.
Now it’s easy to call us and have us change the name of your LLC later. So, you can use a generic name until you actually have the property wrapped up. We can get an Employer Identification Number or EIN for you so you can open a bank account. Once you know the property is closing we can easily amend the name to 1224 E Palm Miami LLC.
Even if you change the name of the company, you can keep the same EIN. Just notify the IRS of the name change on your next tax filing. Just like if you change your own name, like when my wife and I got married she took my last name but she kept her original social security number because she’s still the same person just with a different name. Change the company name and the EIN stays the same because it’s still the same company. It just has a different name.
So, that way you can get your company and bank account all set up and you’re wheels are on the ground and you’re ready to rumble as soon as you put the property into the company. That’s another beauty of using the land trust to own the property. The reason is that you don’t have to change the title of the property when you change the name of the LLC. Why? It’s because the LLC doesn’t own the property. The land trust/trustee owns the property. The LLC is simply the beneficiary of the land trust and the beneficiaries of land trusts are generally not in the public records.
Now, if you don’t want to have to notify the IRS and the bank of the name change, that’s fine too. We can simply apply for the EIN after changing the LLC name and you can open the bank account at that time.
Here are a few other rules to keep in mind. First the name of your company needs to be available. That’s the case if it’s not exactly the same. That is, if the State feels like it could be confused with another company they’ll want you to come up with something more definitive. If there is already a Jackson Industry and you choose Jackson Industries, for example, the examiner might reject it. So be as unique as possible. Then there are certain restricted words that require a license such as Bank or Insurance or University or CPA.
Other than that, naming your company is pretty flexible. You get to choose.
So, we hope this helps. Feel free to use our company naming tool on this page. We like to use the address if the LLC is for owning real estate. We would stay away from using your own personal name when naming a company to own real estate. To increase the odds of the name being available use more than one word unless you use a totally made up name. These are names like Microsoft, Google, Walmart, Costco, Exxon. Those are all just made up words out of the clear blue sky that somebody made. You can do the same. So, if you want to come up with a brand name for a business, the sky’s the limit.
So, we hope this gives you some value and insight and direction to naming your company.
Feel free to call us or fill out a free consultation form to set up an LLC, corporation or trust.