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Should a trademark or an LLC come first?

On Behalf of | Aug 25, 2022 | Trademark Law

When you decide to open up a business in New York, you may decide to establish it as a limited liability company. You may, too, want to trademark your products or services. There are benefits that come with taking both steps. However, you may ask yourself which option might make more sense to do first.

Per Business News Daily, a limited liability company is a business formation type that helps protect your personal assets by limiting your liability if someone files a lawsuit or wins a judgment against your company. A trademark is a word, phrase, symbol or design that distinguishes your product or service from others available on the market.

Why most businesses need trademarks and LLCs

Many business owners mistakenly believe that establishing an LLC protects their brand. However, an LLC provides protection for your personal assets, not your brand identity. A trademark is necessary if you wish to prevent others from using phrases, images or other identifiers that are uniquely your business’s own.

What step you might want to take first

In many cases, it makes sense to create an LLC before a trademark. When you create a trademark, you need to link it to a particular individual or entity. If you plan to create an LLC that is going to use the trademarked materials, then you have to establish the LLC first. It is also faster to create an LLC than it is to secure a trademark.

While many entrepreneurs choose to create LLCs before trademarks, there are some situations in which it might make sense for you to do the opposite.