Expensive LIFT Mistakes: Choosing the Wrong Business Name

Since I started my series on expensive legal, insurance, financial and tax mistakes and launched my new LIFT Foundation System & Toolkit, I have received emails from several people about their own LIFT mistakes.

I wanted to share this one with you because it’s quite representative of reality AND it goes to show you that even if you have been to law school, you still need to know more than you think you do when it comes to the foundation of your business because your mistakes can cost you multi-thousands of dollars.

This comes from Attorney Michael S. Reed who made a multi-thousand dollar LIFT mistake when he chose the wrong name for his business because he just didn’t know:

“In Nov. 2008, I was ready to start my own title company. I formed an LLC in Maryland, my home state. [I formed the LLC and was advised by a tax professional to classify the LLC as an S-Corp, which I see is another topic you have mentioned lately.]

I was going to do business in Maryland, DC and Virginia. I started my own “due diligence,” meaning I searched each of the three government sites to make sure that the name I was choosing as the title company, was not taken. I chose “Esquire Settlements, LLC” as my name.

I ran into a similar looking company name in the Commonwealth of Virginia, known as “Esquire Settlement Services, LLC. I called the State Corporations Commissions and spoke to a clerk, who assured me that, because I was starting an LLC in Maryland, and this company existing since 1990 was a Virginia corporation, that “there shouldn’t be a problem.” Well, that was enough for me, and I happily proceeded with the company formation.

Long story short – everything was going smoothly, until, I received the complaint and summons for an infringement lawsuit in the US Eastern Dist. of Virginia:”
Esquire Settlement Services, Inc. et al v. Esquire Settlements, LLC
Plaintiffs: Esquire Settlement Services, Inc. and Daniel H. Borinsky, PLLC
Defendants: Esquire Settlements, LLC
Case Number: 1:2009cv01189
Filed: October 21, 2009

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So, as you can see, even professionals who you would think would have specific training about these sorts of issues are at risk of making expensive LIFT mistakes.

This one cost Michael several thousands of dollars and could have been so easily avoided, if only he’d known what to do before choosing the name for his corporation.

To make sure you don’t run into your own expensive LIFT mistakes in your business, check out my new LIFT Foundation System & Toolkit at charter member pricing, which will not be available after this Thursday.

And be sure to let me know if you have had any experiences like this yourself.  The more we talk out about these things, the more we can help others avoid making the same mistakes because they are simply doing business in the dark.