LLC vs Trademark: Two Different Protections That Founders Keep Confusing

An LLC keeps your personal assets safe against your company’s financial obligations. A trademark protects the name, logo, slogan, etc. of your brand against competition. Forming an LLC does not grant you any trademark rights, and a trademark does not form a business entity. Therefore, most founders typically form both, and the order in which they are formed is important.

We often get asked about LLCs vs. trademarks, and the confusion is understandable. Both require some level of interaction with a government agency, some level of documentation, and some level of fees. As a result, they both feel like “business protections.” However, they couldn’t be more different, and intermingling the two can result in losing your assets or your brand.

What an LLC Actually Does

An LLC, or limited liability company, creates a business entity that separates your personal assets from your business’s financial obligations. Generally, your personal assets, money, property, etc., will be protected if your business is sued or if your business incurs a loss.

That is the primary function. Additionally, it provides you with a tax structure, a name to list on contracts, and a U.S. business presence if you are not a U.S. citizen.

Formation occurs at the state level via the Secretary of State’s office. In Wyoming, approvals usually take one to three business days. Delaware is similar. California’s approvals take several weeks, and New York’s approvals delay your formation by more than 30 days due to its publication requirement. New York requires a notice to be published in two local newspapers for six consecutive weeks. Until that condition is satisfied, your LLC is not fully formed.

Filing fees as of June 2025 range from $50 in Kentucky to $500 in Massachusetts. Wyoming’s filing fee is $102, and Delaware’s is $90.

An LLC does not trademark your business name. There is nothing stopping any other state from registering the name Blue Crane Media LLC. Florida can, and will, register Blue Crane Media LLC. There is nothing stopping a business from creating a competing brand named Blue Crane Media, either.

What a Trademark Actually Does

A trademark protects a business from a competitor registering a confusingly similar name. If your trademark is registered with the USPTO, you have exclusive rights to the mark in that category in that country.

Trademark registration is handled by the U.S. Patent and Trademark Office (USPTO), not by state agencies. As of June 2025, the base application filing fee for the TEAS Plus application is $250 and covers one class and one mark. A filing that covers multiple classes and marks will cost more. For example, a filing that covers e-commerce class and marks will cost a minimum of $250, as it covers the software filing class and marks. Multi-class filings increase the fees accordingly.

If there are no objections to the filing, the application is approved within the USPTO within 12 to 18 months. The USPTO reviews applications and, if there is a problem with the application or a likelihood of confusion with an existing mark, issues an office action. Most applicants respond to at least one office action before the application is approved.

Trademark filings do not create business entities. Individuals can own a trademark. However, filings alone do not create a business. There is no tax structure, no liability protection with a trademark filing.

Why the Order You File Matters

Most entrepreneurs file an LLC first and then pursue trademark protection. That is generally fine, but the major mistake is building a trademark around a name before conducting a search to see whether the name is protected.

Searching the USPTO trademark database is free, so do it before you file the LLC. Do it before you build the site. Do it before you create the business cards. Search the name you want in the TESS database and check for exact trademark matches. Search for similar names, both phonetic and spelling, within the same class of goods and services. Conflicts are not always apparent.

If you started Helio Health LLC and, after six months, found that Helio was trademarked in health supplements, you’d have to rebrand. LLCs don’t protect you from trademarks.

Most founders do these in steps. The first step is checking trademarks. The second one is naming their LLC. The third step is filing for a trademark. They do this quickly and track the application to ensure it’s registered.

EIN and Compliance After Formation

Many founders skip or delay a few necessary steps after forming their LLCs.

You must get an Employer Identification Number (EIN). It’s a federal tax ID. You can get one for free and quickly online if you’re a U.S. resident with a Social Security Number. If you are a non-resident founder, the IRS online EIN tool won’t work because you need to have an SSN or an ITIN. Non-residents must file Form SS-4 and send it by fax or mail. This generally takes about two to four weeks.

European, Southeast Asian, and Latin American founders are the ones we help the most with this. The timing is a problem for people who need an EIN quickly to open a bank account or to enter a business contract, but the process is easy.

As of January 2024, many LLCs must submit a Beneficial Ownership Information report to FinCEN, following the Corporate Transparency Act. LLCs formed before January 1, 2024, had until January 1, 2025, to submit. Those formed in 2024 had 90 days from the date of formation. Those formed in 2025 and going forward have 30 days. The civil penalty for willful noncompliance is $591 per day.

The BOI report is relatively simple to complete. However, many founders overlook it because it is a new federal requirement, and it is not flagged by the IRS or your state.

Common Mistakes We See

Assuming the LLC name gives trademark protection. Many people assume that just filing for an LLC name provides trademark protection, but that is not the case. An LLC name grant is simply a state acknowledgment that allows you to start a business.

Filing a trademark in the wrong class. The trademark office is organized by a classification system of 45 classes. Many entrepreneurs who file for trademark protection fail to identify the correct class. Software founders will mistakenly select a subclass for technology or product brands that fail to identify the retail class.

Abandoning a trademark application after an office action. Many entrepreneurs will withdraw their applications after receiving a trademark office action. The majority of trademark office actions are fixable. An office action can be resolved by submitting a modification to the description of the goods and services to clarify the application or distinguish the applicant’s mark from the cited mark.

Waiting too long to file. Trademark rights can only be claimed by the first person to use the mark. However, first registrant rights can be claimed by a competitor. If a competitor applies for the same mark after you do, it will create a complex situation, even though you are the first to use the mark.

Skipping the trademark search entirely. A trademark search takes less than 30 minutes. The time spent rebranding is better than extending your audience for a year.

State-Specific Notes

California’s LLCs incur an $800 franchise fee in the first year, unlike other states such as Wyoming and Delaware, which have no such requirement. Founders who value privacy may also appreciate New Mexico’s lack of a public registered agent and an annual report.

New York also has additional requirements that introduce operational delays, such as the publication requirement. After the initial filing, newly formed LLCs spend several weeks meeting the publication requirement by placing notice in two newspapers designated by the County Clerk. Publication costs can be as much as $2,000, depending on the county, and it is a frustrating requirement that catches many founders off guard.

FAQ

Does forming an LLC protect my business name nationwide?

No, forming an LLC in one state does not bar others from using the same business name in another state. If nationwide protection is desired, a federal trademark must be obtained.

Can I file a trademark before I form an LLC?

Yes, the two actions are not dependent upon one another. Many founders choose to confirm that the name is available by filing a trademark application before forming their LLC, then assigning the trademark to the LLC when it is formed.

How long does a trademark registration last?

As long as you keep using the trademark and file the proper paperwork, trademark registration lasts indefinitely. Between years five and six of trademark registration, a Section 8 declaration must be filed to confirm continued use. Between years nine and ten, a combined Section 8 and Section 9 must be filed.

Does my LLC need a trademark to operate?

No. Many LLCs do not register their trademarks. If you are not building a recognizable brand, competing in a trademarked industry, or planning to sell your brand, not registering a trademark will not be a big deal. If your brand name will be an asset, you should register it.

I am a non-resident founder. Can I register a U.S. trademark?

Yes, you can. Foreign nationals can register a trademark with the USPTO. As of August 2019, foreign-domiciled applicants must have a U.S. attorney to represent them during the trademark application process. You do not have to be a resident of the U.S. to own a U.S. trademark.

What if someone is already using my brand name but has not trademarked it?

You may have some rights to the brand name because you have used it in commerce, which is especially true for trademark registration in the U.S. These are common law trademarks. However, rights that are not federally recognized are limited to the areas in which you have used commerce. The easiest way to assert a trademark is to register it federally.

Ready to Form Your LLC?

We process LLC formations in all 50 states for founders in 175+ countries, including EIN applications for non-residents, BOI report filings, and registered agent services. We provide the tools to help you start your U.S. entity the right way. Start your LLC formation with EasyFiling.