Several times a year a client will ask if we can form a corporation in California that has the same name as a corporation that has already been dissolved.
Typically, the California Secretary of State’s Office will not accept a filing to form a new corporation if there is already a corporation with that same name registered with its office.
However, if a corporation has been dissolved it opens the availability of that name again with the California Secretary of State’s Office.
And so the good news is the California Secretary of State’s Office will accept a filing to form a new corporation even if it has the exact same name as a corporation that was previously dissolved.
The bad news is instead of submitting a form online and getting the a federal employer identification number (EIN) in only a few minutes, you would need to submit IRS Form SS-4 to obtain the EIN.
That is important for three reasons. First, you need the EIN to open a business checking account for the corporation. Second, the IRS often takes six to eight weeks to process the SS-4. And so instead of being able to open the business checking account right away after the corporation has been formed, you will not be able to do so for up to eight weeks. Lastly, you need the EIN for other government filings such as many city business license applications and to obtain a seller’s permit. Put another way, the EIN is one of the first dominos that will need to fall before you can fully complete the formation of your corporation.
If you do not want to have to wait six to eight weeks to open the business checking account, another option is to switch out one of the words in the full legal name of the corporation or add one more word to the full legal name. You can then file a Fictitious Business Name Statement with your County Clerk’s Office for the company to also do business as the name that you would like to use.
For example, if the legal entity for our law firm (Bend Law Group, PC) was dissolved you could register a new corporation with the California Secretary of State’s Office with that same name but you would then have to wait up to eight weeks to get the EIN and open the business checking account. Instead, you could have the full legal name of the corporation be Bend Business Law, PC. You could then file a Fictitious Business Name Statement for the corporation to also do business as Bend Law Group without holding up the opening of the business checking account.
Of course, you should think twice before using the same name as a corporation that has already been dissolved. The prior corporation could have debts and liabilities that creditors could try to come after your corporation for as it would be easy to confuse your corporation for the dissolved corporation with the same name.
For example, we had a client who was sued because of this type of mistaken name identification. We filed a motion with the court explaining the mix up and the suit was dismissed, but not before it caused our client to incur additional time and money expenses that it would not have had to incur if it had instead chosen a more distinct name.
In addition, you should check to see if there is already a federal trademark on the name of the corporation.
Lastly, if you are forming a corporation in a different state you should consult with an attorney in your jurisdiction as it might different requirements for when you can use the name of a corporation that has been dissolved.
Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.