Importance of Forming an LLC Before Trademarking
No, you should form an LLC BEFORE trademarking your business name because the trademark application must list the LLC as the trademark owner. So, your LLC must exist before you file your trademark application.
Understanding Trademarks and LLCs
Let’s get started! What is a Trademark, and What Does It Do for My Business? A trademark is a sign that distinguishes the goods or services of one company from those of another.
Priority of Establishing an LLC Before Trademark
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.
Important Points:
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Your LLC should file all trademark applications. Only a trademark’s legal owner can apply for federal trademark protection (throughout the USA), which should be your LLC. So, when you apply for a trademark, use your LLC’s legal name when submitting your trademark application to the US Patent and Trademark Office (USPTO).
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It’s vital your LLC establishes your trademark is in use. You can’t register a trademark and leave it sitting on the shelf. USPTO rules state that for a mark to remain in force, you must use it in commerce.
Comparing LLCs and Trademarks
The main difference between an LLC and trademark is that LLCs provide protection from personal liability for debts incurred by the business, whereas trademarks protect the brand name associated with certain products.
Deciding Between an LLC and Trademark
The main difference between a trademark and an LLC is that a trademark prevents competitors from using your name or logo, whereas an LLC shields your personal assets from lawsuits and bankruptcies. So, an LLC protects you financially, while a trademark distinguishes your product or service.
Conclusion
In conclusion, understanding the differences between a trademark and LLC is vital for entrepreneurs. While both structures offer distinct benefits, each structure is unique, and their selection depends on the nature and objectives of the business.