Legal Question in Business Law in California

I own an LLC with an ex-girlfriend. We are having issues. I am planning on reopening under a new name, as a sole proprietor. How unique does the name have to be? Eg: Current name "Lil Devils Boutique." Suggested new name "Little Devil"


Asked on 2/14/10, 5:09 pm

3 Answers from Attorneys

Richard Jefferson M.E.T.A.L. LAW GROUP, LLP

It depends on whether the previous LLC was using the name as a Trademark (vs. just a business name). If it is being used as a trademark then that small distinction probably wouldn't work.

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Answered on 2/19/10, 5:12 pm
Kevin B. Murphy Franchise Foundations, APC

The test is likelihood of confusion. Consult with a trademark attorney in your area.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 2/19/10, 5:26 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Without questioning the accuracy of the previous answers, as far as they go, I need to add that you may be looking only at one aspect of a bigger problem. When two people associate themselves together in a business, whether set up as a general partnership, an LLC, or a closely-held corporation, they take on certain duties and responsibilities toward the business and to each other. Generally, but not always, such co-venturers are fiduciaries of one another and of the business. Responsibilities assumed often include duties to refer business opportunities to the jointly-operated business and not to seize them for ones self or for a different, competing business.

Also, I would never just walk away from a business started with someone else, incuding one where your personal liability presumably is limited to your investment (such as an LLC or corporation), without making some effort to withdraw formally or to dissolve and wind up.

So, I don't think the name is itself the biggest issue. You have a contract (your operating agreement) with the ex-girlfriend, and you have fiduciary responsibilities to her and the LLC. Especially where there is probably some personal rancor involved, it is risky to take a hike without closing out your connection to the existing business.

In any event, don't make the mistake many do of failing to close any accounts where you are a personal guarantor.

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Answered on 2/19/10, 9:26 pm


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