You’re most likely reading this post because you want to protect your assets and intellectual property.
Now you need to know, “which comes first, trademark or LLC?”
And it’s vital to know when starting a business; otherwise, you could lose your branding, or worse!
So, which comes first, trademark or LLC?
You’re about to find out.
Before we find the answer, let’s examine what they both mean and what they can do for your business.
Trademarks are a form of intellectual property (intangible creations by humans) that can be a word, symbol, phrase, design, or combination that identifies services or products belonging to a specific source.
Some examples are Twitter’s bird, Nike’s swoosh, and Starbucks’ Siren.
There are many types of intellectual property; the most well-known are trademarks, copyrights, and patents.
The purpose of a trademark is to enable consumers to identify your product or service and distinguish them from your competitors.
Trademark owners can be individuals like Michael Jordan and, just recently, Hussain Bolt, who both use a silhouette of their outline. Or a legal entity, like a corporation or an LLC.
You apply for a trademark with the US Patent and Trademark Office (UPSTO). Your creation must be original and distinctive to ensure it isn’t confused with an existing mark.
LLC is an abbreviation for “limited liability company.” It’s a hybrid business entity that combines the characteristics of a sole proprietorship/partnership with those of a corporation.
As an LLC owner (known as a member), you get the limited liability protection of a corporation and the simplified pass-through tax structure of a sole proprietorship. The LLC protects your assets against business debts or litigation cases, and you pay taxes via your personal tax return.
Overall, the simplicity of starting an LLC make it a popular choice with new business owners.
LLCs and trademarks go together like peanut butter and jelly, and you’ll rarely find one without the other.
But which is which, and what’s their purpose?
Your LLC is the peanut butter in your PB&J; it’s what you build everything else upon, including your trademarks.
The fundamental difference between an LLC and a trademark is an LLC can shield its owners from bankruptcies and lawsuits, protecting them financially. While a trademark protects the intellectual property of an LLC, preventing unscrupulous competitors from using your brand designs.
For example, suppose you’re a local handyman business with no intention of expanding. Name it after yourself, e.g., “Joe’s handyman business,” and use a generic image of a leaking tap as your logo. In that case, you might not need a trademark.
But suppose you plan to grow your business, hire employees, open a business bank account, and expand your services. In this case, it’s wise to safeguard your assets by starting an LLC.
So, do you need both?
Yes, if you’re considering starting an LLC.
Because, just like a PB&J sandwich, LLCs and trademarks need one another.
The quick answer is you should form an LLC before applying for a trademark.
And here are several important reasons:
All trademarks have owners, whether an individual, an LLC, or any other business entity, and a trademark’s ownership is determined by who uses it.
So, if you choose the LLC structure to run your business and want to use a specific trademark for its branding, you must first create your LLC by filing Articles of Organization with your Secretary of State’s office.
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).
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.
Instead, you must use your trademark in relation to the sale of services or goods, and by starting an LLC first and applying your trademark to your product or service, you prove you’re using it for commerce.
Trademarks provide you with zero limited liability protection.
So, suppose another business steals your trademark logo, using it to sell similar but under-quality goods on a platform like Amazon.
In this case, you can sue them for trademark infringement but not for any damage caused by their actions (such as loss of reputation or profits).
You now know the answer to “which comes first, Trademark or LLC”?
Pretty easy, right?
All you need to do now is form your LLC, and we can help you with that too!
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
Terry is a serial entrepreneur with over 25 years of experience building businesses across multiple industries – construction, real estate, e-commerce, hotelier, and now digital media. When not working, Terry likes to kick back and relax with family, explore Taoism’s mysteries, or savor the taste of fine Italian red wine.