LLC First or Trademark?

We are living in time where everyone wants to explore their entrepreneurial skills by starting businesses. I believe this is great when it is done correctly and ethically. My colleagues always inquire about the different routes they should go to legitimatize their businesses and my answer is always .. “It depends on…”. I see a trend of people making their businesses LLCs but never once consider Trademark which worries me. Both ways are beneficial but I do believe it depends on what type of business is being ran to determine which route to go. 

IMG_4138I trademarked Outwest, IL because it was catchy and I could see someone else printing the same thing on a shirt/sweatshirt/hoodie so I hurry up and did it for protection and also did it before someone else did it before me. Trademarking the phrase grants me the right to be the only person to use it and if it was to be used by someone else I can take them to court and gain all profit for what was sold on their end. I never thought about turning Outwest, IL into a LLC until I wanted to fundraisers and events. At that point, I was starting to function as a company so I did believe it was necessary. Before spending unnecessary money on fees for a LLC and a Trademark, first evaluate the purpose/mission of your business. 

LLC PROS:

  • Liability is limited to the extent of owner’s investment, his/her personal assets are protected.
  • Profits and losses may be allocated differently than owners’ contributions upend agreement between them.
  • Capital can be raised through the sale of company interest. 
  • Beneficial tax treatment.
  • Ability to raise capital for business. 

TRADEMARK PROS:

  • Your trademark could also provide the right to legal action against anyone that infringes upon it.
  • Registering the trademark ensures that other companies will not have a similar trademark, and gives your company exclusive rights to operate and market under said trademark.
  • You can use the symbol, “®” after your trademark, which indicates your mark is federally registered, adding to the prestige of your company.

“Do i need a trademark if i have a llc?”

Yes. Nothing represents your company and brand more than your business name. It’s the cornerstone of your business and shapes everything that follows .When it comes to your business name and trademark protection, a few proactive steps can go a long way toward protecting your business name, brand and identity.  When you incorporate, form an LLC this process registers your business name with that state’s secretary of state. Once approved, the business name is yours and yours alone to use within that state. It prevents anyone else from using the name within the state, but it doesn’t offer any kind of protection in the other 49 states.

So, if you ask me which one I would recommend, I would recommend both! Both provides different protection for your company and company’s name. Doing both will legalize and legitimize your future fortune business :). 

 To Trademark your business : https://www.uspto.gov/trademark

To make your business a LLC: https://www.cyberdriveillinois.com/departments/business_services/organization/llc_instructions.html