How to register a company name and if under LLC or Corporation?
December 6, 2013 2:01 PM   Subscribe

Hello, I am currently developing a small food business. I am interested in selling my food on weekends at outdoor markets across the city. I think this is a good way for me to get my feet off the ground and see how people respond to my product. What I can't quite figure out is if it is too soon to start thinking about registering the company name and logo? If so, would I register my small business as a LLC business or corporation? I am a bit confused. Would someone be able to help? Thank you!
posted by delasoull to Work & Money (6 answers total) 4 users marked this as a favorite
Yes, please register. Whether as an LLC or corporation depends on a lot of variables that you need to sort through, but for a lot of simple businesses with simpler beginnings, an LLC makes a lot of sense. This is important because you will be limiting your personal liability to the business. With some businesses where there is practically no liability anyhow, it's possible to delay all of this a few months or even forever. However, you don't want someone to get food poisoning or whatever, and then wipe out your personal assets since you weren't working under an LLC or other status that offers protection to personal assets.

Good luck!
posted by cacao at 2:10 PM on December 6, 2013

Registering a name and logo are called trademarks. This is separate from the legal form of a company. Registering trademarks can be difficult and expensive which is why most small business operators don't do it. Whether or not you should and how to do it are questions best posed to a lawyer because done improperly you can waste a lot of money and still not receive trademark protection.

Separate from a trademark is the legal status of your business. There are three main types:

- Sole proprietor. This is you, acting in your own name (or with something called a "doing business as" name, so Kelly A. Smith DBA Kelly's Treats). You are personally liable for the debts of the business, any income you make is solely yours and is treated as your own taxable income, and you can sue and be sued for business activities in your own name.

- Partnership. You and another person or set of people operate a business as a collection of, essentially, sole proprietors.

- Corporation or LLC. You register your business with the state and it becomes a distinct legal entity from you. This costs money, often in up-front filing fees and annual costs to the state where you register. Most small business operators use an LLC ("limited liability company") because it is often cheaper than doing a full incorporation and it is usually easier on paperwork. The business entity is separate from you. It is legally responsible for the debts of the business, it can sue and be sued for business activities, and income is charged as taxable to it.

You should definitely incorporate/form an LLC. Your state will have sample forms to do this with. Read Nolo Press books on forming and running an LLC for good advice on what to do. Be sure to check with your city about licensing requirements, especially when it comes to food. If you live or intend to sell in a very urban area (New York City, Dallas, Los Angeles, Chicago), you will definitely have license and permit tasks to undertake.
posted by fireoyster at 2:15 PM on December 6, 2013

Places like Nolo can be very useful in familiarizing yourself with various issues, but you may want to start with the SBA since they have a bunch of free introductory resources.
posted by aramaic at 2:16 PM on December 6, 2013 [1 favorite]

Check out Nolo Press (here is their "Form your LLC" book) and also for lots of free online advice, and links to very detailed, thorough books you can purchase.

The basic problem here is that you need legal advice, which you may think you can't afford - and it's true that there are not many lawyers willing and able to help people in your situation for a reasonable fee. That's why this self-help book industry has popped up around this subject in particular. If you are not willing / able to consult a lawyer about this question, please at least consider buying a well-reviewed book once you get serious about registering things.
posted by Joey Buttafoucault at 2:19 PM on December 6, 2013

Your local chamber of commerce may have resources in the form of referrals and classes and how-to guides.
posted by rtha at 2:31 PM on December 6, 2013

Registering a name and logo are called trademarks.

That statement is potentially confusing. More precisely, registering a brand name and/or logo would mean filing a trademark application. Registering a business name (as opposed to a brand name) might just be a matter of establishing a legal DBA ("doing business as") by filing a form with the city or county government. Alternatively, if the company is registered as a corporation or LLC in the name you want to use, then you don't need a DBA. You might want to get further input on OnStartups, which is a Q&A site that specializes in these types of questions. (I am not affiliated with the site)
posted by Dansaman at 8:45 PM on December 6, 2013

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