Can two LLCs use the same name if they're incorporated in different states?

Question

I want to incorporate an LLC in a state. (From what I understand, that happens on a state level, not federal).

If I incorporate in state A, someone else in state A can't create a company with the same name. However, someone in state B can (at least that's how I thought it worked).

So if I incorporate in a state that's not my home state, someone else can start their own company in my home state, but incorporate it there, and then we'd have two companies in a state operating under the same name.

Is that correct? If it is, I'm guessing there's not much I can do about it, besides maybe trademark the company name.

Answer 1

It is certainly possible to incorporate companies with the same name in two different states.

If neither company does business in the other person's state under that name, it isn't actionable for either company.

If one company was already doing business under its name in a state where another company is formed under that name, it would usually be possible to force the new company to cease and desist from using that name, either with an action directed at the infringer and the Secretary of State (or other official charged with business incorporations in a state) of that state, or in an action directly against the infringer alone.

Also, even if a trademark isn't formally registered, it can arise at common law simply through use of a name in a particular market in a particular place. This is harder to prove and the remedies for violating a common law trademark a more limited, but it is not entirely unenforceable.