Tips on How to Choose a Business Name.
Your business name is what gives your business an identity. When a child is born, his parents will give him names so that he can have his own identity. The parents will not allow people to call the child names that are useless or that are not having good meanings. In fact, particularly in Africa countries, each name has its own significance. A Child can be named based on circumstances that surround the birth of the child. A child can be given a name that speaks about what the parents expect the child to manifest or become in future. This is the same in the business world. Having conceived a business idea and the idea has given birth to a business; the next thing is to give it a business name. You have to create an identity for your business whether it is a sole proprietorship, partnership or limited liability company. That is what makes people identify with your business. It shows that you are actually ready to take your business to a higher level. You cannot be doing a business without creating an identity for it. The same way parent will not give their child a bad name, you need to carefully choose a name that will project good image about your business. Whatever name you want to give your business, it is very important that you are not infringing somebody’s right or trademark.
These are options you can adopt in creating a business name.
Your personal name
Some people adopt their own name as their business name. That is, they name the business after their personal name. If you want to use your personal name, you can still do it in such a way that people can still connect with what you do. For example, Caroline Fashion Designs. In this example, one can easily identify that the business is owned by Caroline and the business is into fashion design. While there may not be anything wrong with this, it has its own pros and cons.
Using your own name as business name tends to create a form of personal and emotional attachment between you and your business. Since the company bears your name, there is tendency that you will do everything possible to ensure that the business does not fail. But you need to sit down and count the costs in case the unexpected happens because whatever happens to the business has direct impact on your personality. For example, if the company succeeds, your name will be reckoned with in the society but if it goes otherwise, it can drag the goodwill you have built overtime to level zero.
Read Also: Choosing A Legal Structure of A Business
You also need to consider the future expansion plan for your business. Would you be able to convince other people to invest in the company bearing your name? Some people may see your business as a family business.
Coined business name
Coined business name is an assumed name. That is, any name different from your own. It can be fanciful, generic or descriptive but I usually prefer descriptive business name. This can be a name of an object or item related to what you will be dealing in. For example, a person selling computers can name his business “XYZ Computers”. Assumed business name is common. If you are using an assumed business name, it is always advisable to use a name that has a direct link to the type of business you are doing. It should be able to communicate to people about your business. It should not be misleading. Your name should be able to say something to a certain degree about what you are offering to the populace. If you are smart with the choice of name, it can actually serve as effective advertising tool for you. On the other hand, if you want to have a unique name that does not necessarily has anything with what you offer, it can be a good way of branding but you need to prepare to spend a lot of money on marketing. It is good that your business name sounds good and is easy to remember. Choose a name that is web-ready. In another word, you need to conduct a web search to ensure that a suitable domain name is still available for your business use. Let me give you some tips on how to come up with names that will most likely available for your use.
1. You can reverse the spelling of your name if it will be pronounceable. For example, Oprah Winfrey named her company ‘Harpo’ which is Oprah in reverse spelling. You can do the same if it sounds good.
2. You can choose a word and decide to omit some few letters from it. For example, let’s look at the word ‘register’. If you remove the first letter ‘r’, you now have ‘egister’.
Those are just tips. I am not saying that the words will be available but they have higher probability of being available. I believe that following these tips can save you time and money you will have spent to apply for a new name if your first application is not approved.
However, choosing a business name is just one step, you need to register the business name with the Corporate Affairs Commission. Corporate Affairs Commission is an autonomous body responsible for regulating the formation and management of companies in Nigeria. Registering the business name will give you a legal right to operate the business in your chosen name. Without the registration, you cannot enter into any legal transaction in the name of the company. For example, if you want to source for capital either from the bank or from private investors, they want to be sure that the business actually exists. Before you can even open a bank account on the business name, bank will carry out a search to confirm that the business name has been properly registered. Nevertheless, it is not automatic that the name you have chosen will be approved by the Corporate Affairs Commission. Your chosen name can be disapproved for the following reasons:
1. The business name is the same or very similar to an existing business name
2. The business name is offensive, undesirable or misleading
3. The business name is contrary to public policy
4. The business name is similar to a Registered Trademark or Business Name except with the consent of the owners
5. The business name contains the words ‘Chamber of Commerce’ which is restricted only to companies limited by guarantee
6. You do not possess necessary qualifications to use such business name. For example, before you can include “Engineering” as part of your business or company name, you must belong to professional body governing the practice of engineering in Nigeria.
Also, there are certain names which require prior Consent of the Commission and these include the following:
- · Names that contain any of the following words: Federal, National, Regional, State or Local Government.
- · Names that suggest Government patronage
- · Ministries or Department of Government
- · Names that contain the Word Municipal, Chartered, Co-operative, Building Society
- · Names that contain the word ‘Group’ or ‘Holding’
In order to avoid identity theft, it is strongly advised that you make the registration of your business name a priority. If you don’t, you will be surprised that someone has gone to register the same business name and you will not be able to take any legal action against him. How would you feel if somebody or a small company starts threatening you to drop the business name people have known you with simply because you failed to register the name and the person bypassed you in registering the name? Imagine the pain of losing the name and the goodwill that you must have garnered for the business over the years. My advice is that people should go on with the registration of their business name before the name is made known to the public.