It’s no big secret that there are a lot of things that go into starting a business. A lot of steps that need to be taken and a lot of TO-DOs that need to be checked off. It can often be pretty confusing, figuring out the proper order for doing all of that. What do I do first? Do I worry about this? Or do I need to take care of this first?
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When you’re starting a business, should you get a trademark or LLC first?
There are two common priorities when starting a business: 1) we want to protect ourselves and 2) we want to protect our new, burgeoning brand. Forming an LLC is a great way to protect our personal liability and trademark registration is the best way to protect our brand. So the big question is, “Do I form the LLC first, or do I file for the trademark first?”
As with most things, there is no one right answer. It always depends on your situation, your circumstances. But generally speaking, it is best to form the business first.
Why? The trademark needs to be owned by someone. The trademark owner is typically going to be the one who is using the trademark. If the plan is to form an LLC to operate your business using that trademark, then the LLC would be the trademark owner. So the LLC needs to exist before the application is filed.
Let’s say we file the application for the trademark first. The LLC can’t be named as the applicant/owner of the trademark because the LLC doesn’t exist.
Instead, you as an individual would have to be the applicant and the owner. You will have to either assign the application to the LLC later (which can only be done in specific phases) or start using the trademark yourself then assign it to the LLC after it is registered. Otherwise, you risk having the trademark canceled and voided if the trademark applicant (you) isn’t the same as the trademark owner (the LLC).
In the end, it is best to form the LLC or business entity before filing a trademark application.
It is best to work with an attorney who is licensed in your state to set up your LLC. Alternatively, you can use a trusted online filing service or other DIY resource. A few of our favorites are:
- Northwest Registered Agent
- Zen Business
- Harbor Compliance
- Tailor Brands
- The LLC Launch Kit
- The LLC Doc Bundle
But don’t ignore the trademark
Just because we’re not worried about the trademark just yet doesn’t mean we don’t need to worry about the trademark just yet. This is especially important if the name of the LLC is also going to be the trademark.
This can often be confusing: a business’s trademarks are not always the same as the business’s name. You can have your LLC be registered under one name and your trademark can be something completely different. You don’t necessarily have to do business under the name of your LLC.
But if the LLC name is what you’re going to use as your trademark, if that’s going to be the trademark, if that’s going to be the brand, then you do want to at least do some preliminary trademark clearance before you commit to a specific LLC name.
A trademark isn’t a trademark until it becomes a trademark.
You want to get your trademark protected before you put it out there. But the problem with that is that you have to put the trademark out there before it becomes a trademark.
Just because you file the application for the trademark doesn’t mean it’s a trademark if you’re not actually using it as a trademark yet. So just because we filed the application, that’s not giving you really a whole lot of benefit.
It’s giving you some benefit because it’s getting you in the system, getting the trademark in the database and it’s getting that ball rolling. But if you file the application and never start doing business, never start using the trademark, then you’re not gonna have a trademark because you have to be using it in order for it to be a trademark.
And finally, just to clear up a little bit of confusion that I often deal with, LLC registration, registering an LLC or a corporation or any other kind of business with your state or at the state level does essentially nothing for trademark protection. LLC registrations and trademark registrations are completely separate and different things. If you register an LLC, that doesn’t mean you have a trademark in that name or any real kind of trademark protection. Again, you have to actually be using the trademark. It’s only when you use the trademark that it becomes a trademark and some trademark rights are attached.
Learn more about it in this episode of All Up In Yo’ Business.
Looking for help with your trademark application? Then check out Brand Bombshell, our all-inclusive trademark registration package. And be sure to subscribe to our YouTube channel for more All Up In Yo’ Business!