What’s the Difference Between LLC and Trademark?
Both LLCs and trademarks offer protections to businesses. But the protections they offer are different and rarely overlap. Between them, they protect everything from a business owner’s assets to the business’s assets to branding items that other businesses then can’t simply replicate. Learn more about both and why it could be good business practice to have both rather than either-or.
What Is an LLC?
An LLC is a legal business entity that exists to protect the business owner from lawsuits that could financially ruin a business and from business bankruptcies that could otherwise lead to personal bankruptcy. It separates the business owner from the business’s liabilities. If creditors take an LLC to court, the only assets they might gain access to are those of the business. The owner’s home, personal investment accounts, etc., can’t be taken. This also works in reverse, so if someone is personally sued, their business assets can’t be seized.
What Is a Trademark?
A trademark is a process conducted with the United States Patent and Trade Office (USPTO) to prove that specific types of marks, such as logos, branding, and taglines, are currently in use and specific to one business. Getting a registered trademark from the USPTO allows the business to have the only full rights to use that mark in conjunction with their business, whether it’s focused on products or services. A trademark is only issued for things that are currently in use, which the business owner has to prove. It can’t be applied for prior to use in a business, nor can it be maintained if the business goes dormant. It helps businesses protect their brands by giving them legal rights to use those marks in ways that other companies are prohibited from doing. It’s up to the business owner to make sure the trademark remains current as long as the mark is in use.
Why Do Both?
Having an LLC and trademarks offers protection for the business and business owner assets, while the trademark protects the intellectual property rights that the business needs to use in branding. There is a little overlap. For example, having an LLC protects a business within the state it’s registered in, which means that if someone tried to start a business with the same name and products or services within that state, the LLC can provide legal protection. But if someone across the state line tries to re-create the business, the LLC won’t help—but a federally registered trademark will.
Let Us Advise You
If you need assistance with setting up an LLC or applying for a trademark, call us at 317-663-9190 to learn more about each and how we can provide assistance in either case.