LLC vs. Trademark: LLC or Trademark First?
LLCs and trademarks both provide important benefits for businesses, but they are fundamentally different. Let’s take a look at what each can provide and how they’re different.
What is an LLC?
An LLC is a business structure that legally separates your personal assets from your business. This means that if something goes wrong with the company, creditors cannot come after you for any of the debts or liabilities incurred during the course of its existence.
What is a trademark?
A trademark is a sign that distinguishes one trader’s products or services from those of others. It can take many forms, including words, phrases, logos, symbols, colors and even sounds. Trademarks are registered with the U.S. Patent and Trademark Office for legal protection against infringement by others who use the same or similar marks.
Should I start an LLC or register a trademark first?
You have a great idea for a business that you want to start. You’ve already chosen the name of your company and know how it will work, but now you’re wondering if it’s better to register the LLC first or the trademark first so no one can steal it?
The answer is easy. An LLC is the better option to start with because you will need an entity to register your trademark. That way, you can always trademark your name later if needed – but you’ll have to buy the trademark from yourself if you’ve already registered as an LLC.
An LLC registration is relatively inexpensive and straightforward, and it offers some degree of legal protection against others using your company name or logo without permission. However, it’s important to keep in mind that an LLC provides limited protection – so if someone does infringe on your trademarks, you may need to take legal action to protect your rights.
Do I need a trademark if I have an LLC?
There’s a common misconception that having an LLC is all you need to do to protect your brand. But that’s not true – an LLC only protects your personal assets, it doesn’t do anything to protect your brand. That’s why you need a trademark.
A trademark is a legal way to protect your brand name and logo from being used by anyone else. It’s like a sign that says “This brand belongs to me.” Once you have a trademark, you can take legal action if someone tries to use your brand without permission.
Can an LLC own a trademark?
Yes, you can register your trademark under the umbrella of your LLC. The LLC will be the owner of the mark and will have exclusive rights to its use. You’ll need to file an application with the USPTO and provide evidence that the LLC is actively using the mark in commerce.
Below you can find a very useful video that explains this in detail.
What’s the best way to start an LLC?
You can start an LLC on your own by filing the necessary paperwork with your local LLC filing office. You’ll need to choose a name for your LLC, draft an operating agreement among its members, and pay any applicable fees. Check our How To Start an LLC page for more information.
You can also use an LLC formation service to handle the process for you. It will likely cost you a bit more than doing it yourself, but it can be well worth it in terms of time savings and legal protection. We have reviewed and compiled the best LLC formation services for you so you can compare and select from them.
The difference between an LLC and a trademark is that one protects you from liability, while the other distinguishes your product or service. You can register both of these before beginning any business activities, but it’s generally advisable to start with the company structure first. An advantage of starting with an LLC is that you will be able to protect your trademarks later if needed.
LLC vs Trademark
Here’s a breakdown of the differences and when you should register each.