Delaware has become the preferred state to "incorporate" (or register) a business in the US because of its business-friendly environment, favourable tax laws and specialised court system focused on business disputes. The large number of businesses incorporated there – almost 2 million as of the end of 2022 – has strengthened Delaware's reputation as a haven for businesses of all sizes and stages.

Choosing a company name is necessary when incorporating in Delaware or anywhere else, and the first step is to confirm the availability of that name in your state of incorporation. Below, we'll describe how to choose a business name in Delaware and what you should consider.

What's in this article?

• Company naming rules in Delaware
  
• How to check company name availability in Delaware
  
• How to reserve and register corporation names in Delaware
  
• Key considerations when naming your corporation
  

Company naming rules in Delaware

Delaware has specific rules and guidelines governing how you can name your company. These rules create clarity and help to maintain certain legal standards.

Before committing to a name, you'll need to conduct a name search through the Delaware Division of Corporations to check whether your desired name is available and complies with state regulations. Consulting a legal professional can also help ensure that your business name is in line with Delaware rules. If you have chosen a name but are not ready to register your company, Delaware allows you to reserve a name for up to 120 days.

Here's an overview of the key naming rules for companies in Delaware:

• Distinctiveness: The name of your Delaware company must be distinguishable from the names of other businesses registered in the state. This helps prevent confusion and ensures that each company can be uniquely identified.

• Corporate suffix: Your company name must end with the proper designator for your type of business entity. For corporations, common suffixes include "Incorporated", "Corporation", "Company" and abbreviations such as "Inc.", "Corp." and "Co.". For limited liability companies (LLCs), the name must include "Limited Liability Company" or an abbreviation such as "LLC" or "L.L.C.".

• Restricted words: Certain words are restricted and may require additional approval or qualification to use. For example, using words such as "Bank", "Attorney" or "University" may require additional documentation and approval from the relevant state authorities.

• Prohibited words: Delaware law prohibits certain words in business names that could mislead the public. For instance, a company cannot use words that suggest it is a government agency.

• Specific business type requirements: Depending on your business type, there may be additional naming rules. For instance, professional corporations providing licensed services (such as legal or medical services) have specific requirements.

How to check company name availability in Delaware

To check the availability of a company name in Delaware, you can use the tools provided by the Delaware Division of Corporations. Here's a step-by-step guide to help you through the process:

• Open the name search tool: Open the name availability search tool on the Delaware Division of Corporations website. This tool will tell you whether your desired business name is available or in use by another Delaware entity.

• Conduct a name search: Enter the name that you wish to use for your business in the search tool. Make sure that you exclude any business entity suffixes, such as "LLC" or "Inc.", when you perform the search. This will give you a broader range of similar names and help you determine whether there are any conflicts.

• Analyse the search results: After submitting your search, you'll receive a list of names that are identical or similar to the one you entered. Review these results carefully. If your desired name is too similar to an existing name, you might need to consider alternative names.

• Check for name variations: Check for variations of your desired name as well. This includes different spellings, phonetic equivalents or names that sound similar. The goal is to confirm that your chosen name is distinctive and not likely to be confused with any existing businesses.

Even if your chosen name is available, it must still meet all other naming guidelines set forth by the state of Delaware.

How to reserve and register corporation names in Delaware

Reserving and registering a corporation name in Delaware is a straightforward process. Here's how you can do it:

Reserving a corporation name in Delaware

• Submit a reservation request: The name availability search tool will offer the option to reserve your company name once you've determined that it's available. Click "Yes" and proceed to payment.

• Pay the reservation fee: There will be a small fee for reserving the name. The exact amount and payment methods available will be detailed on the Delaware Division of Corporations website when you proceed to payment.

• Receive confirmation: You'll receive confirmation once your reservation request and payment have been processed. This reservation typically holds the name for 120 days, during which time no other entity can register a company with that name in Delaware.

Registering a corporation name in Delaware

• Prepare the Certificate of Incorporation: Prepare and file a Certificate of Incorporation with the Delaware Division of Corporations. This document includes details of your corporation, such as the corporation's name, purpose, registered agent information, stock details and incorporator information.

• Review state requirements: Check that your Certificate of Incorporation request complies with Delaware state requirements. You can find guidelines and templates on the Delaware Division of Corporations website.

• File the Certificate of Incorporation: Submit your Certificate of Incorporation request to the Delaware Division of Corporations. You can do this online or by post. A filing fee will apply, the amount of which will depend on factors including the company's number of authorised shares. The fee structure can be found here.

• Receive confirmation: Once the state has processed and approved your Certificate of Incorporation, it will confirm that your corporation is officially registered and that the name has been secured for your use.

Key considerations when naming your corporation

Your choice of corporation name can have long-lasting implications for your brand identity, legal standing and overall business strategy. Here are some key factors to consider when naming your corporation:

Legal and regulatory considerations

• Compliance with state laws: Your name must adhere to the legal requirements of the state in which you're incorporating.

• Distinguishability: Your corporation's name must be distinguishable from other names on the state register, for your legal identity and for brand differentiation.

• Trademark concerns: Your corporation name cannot infringe any existing trademarks. Conduct a comprehensive trademark search to avoid legal conflicts and potential rebranding.

• Domain availability: Your chosen name should have a suitable domain name available. Having a matching or relevant domain is key for your online presence and marketing strategy.

• Growth: Your name shouldn't limit your business to a particular geographical location or product line, unless that's your intention. A versatile name can accommodate expansion and diversification.

Personal and branding considerations

• Brand image: Your corporation's name is often the first point of contact with your audience and can affect customer perception, marketing and brand equity. The name should reflect the brand image and values you want to convey.

• Memorability and pronunciation: A good corporate name should be easy to remember and pronounce. This helps word-of-mouth marketing and makes it easy for potential customers to find and refer to your business.

• Cultural sensitivity: Be mindful of how your name translates into different languages and cultures, especially if you plan to operate internationally. Avoid names that might have negative or offensive connotations in other cultures.

• Longevity: Choose a name that will stand the test of time. Trendy names might lose relevance or appeal as trends change. A timeless name allows for long-term brand stability.

• Personal connection: Some business owners prefer to include their name in the corporation, which can add a personal touch and convey a sense of ownership and trust. Consider the implications for your privacy and the business's future, especially if you plan to sell the company or expand ownership.

Angel investors vs. other types of investors

Before pursuing funding from angel investors, familiarise yourself with other types of startup investors. Here's an overview of investment options:

• Venture capitalists: Venture capitalists (VCs) are firms or individuals that invest in startups showing strong potential for growth, usually in exchange for equity. Unlike angel investors, they typically invest during the later stages of a startup's development, after the business has shown some market traction. VCs invest larger sums of money than angel investors and are usually more involved in the direction of the company. They seek substantial returns and typically have a more aggressive view toward scaling the business and achieving an exit within a specific timeframe.

• Seed funds: Seed funds are specialised VC funds that focus on early-stage investments, often before angel investment and larger VC rounds. They invest in startups that have moved past the conceptual stage and have a minimum viable product (MVP) or some initial traction.

• Incubators and accelerators: These programs support early-stage companies through education, mentorship and financing. Incubators focus most often on the initial development phase, helping entrepreneurs turn ideas into a viable business. Accelerators, on the other hand, look to scale up the growth of existing companies over a short period of time.

• Corporate investors: Some corporations invest in startups to access innovative technologies, enter new markets, or nurture strategic partnerships. These investors can offer ample resources, but they might seek more than just financial returns, such as an ownership stake in the technology or control over the company's direction.

• Crowdfunding: This involves raising small amounts of money from a large number of people, typically through online platforms. Crowdfunding can be a good option for startups that want to validate their product with a broad audience, interact with potential customers and raise funds without giving up equity or incurring debt.

• Government grants and subsidies: In some sectors – particularly those involving scientific research, clean technology, or social impact – government grants and subsidies can provide funding without diluting equity.

• Peer-to-peer lending and debt financing: Debt financing includes loans from financial institutions or peer-to-peer lending platforms. This type of financing is typically more challenging for early-stage startups to secure and it obligates a startup to repay the loan, with interest, but it doesn't dilute ownership.

• Family offices: High net-worth families often have private wealth management advisory firms, known as family offices, that directly invest in startups. These investors can provide substantial funding and might be interested in longer-term investments compared to traditional VCs.

• Angel groups and syndicates: Unlike individual angel investors, angel groups or syndicates pool resources to invest in startups. These groups can provide larger sums of capital and combine the expertise and networks of multiple investors.

Each type of investor offers different advantages, expectations and levels of involvement. Startups should carefully consider their stage of development, industry, funding needs and the kind of strategic relationships they want to grow before deciding which type of investor to work with.