Trademark Vs LLC - 5 Differences Between Them

There are a few key differences between Trademark vs LLCs.

Before detailing all the 5 key differences - here are some highlights:

1. Trademarks protect your brand identity, while LLCs protect your assets.
2. Trademarks can be registered with the USPTO (United States Patent and Trademark Office), while LLCs are formed at the state level. (mostly at Secretary of State Offices)
3. None of these is a must to start a business. [But having them helps a great deal].

Knowing the basic meaning and purpose of LLCs and Trademarks can help us understand the differences in a better way. So first, we covered an overview of what an LLC is and what a Trademark is before going into the differences.

What Does LLC Mean?

LLC, as an acronym, stands for limited liability company. It is a business structure that combines the pass-through taxation of a sole proprietorship or partnership with the limited liability of a corporation. Limited liability basically means that the owners are not personally liable for the debts of the LLC.

What is a Trademark?

A Trademark is a symbol, word, phrase, or logo used to protect the brand identity of a business. It also helps the customers identify a particular product, service, or company. 

Note: A Trademark cannot be considered unless the company starts using it to distinguish its brand or services from others.

Difference between Trademark vs LLC

1. Purpose: LLC is intended to protect your business interests, while a Trademark is intended to protect your brand identity.

While LLCs are legal business structures that provide flexible taxation and separate company owners' personal assets from lawsuits and bankruptcies, trademarks safeguard intellectual properties like logos and brand names.

2. Registration

Trademarks: You can have a state or federal trademark in the US. A state trademark is registered with the respective state trademark office. Federal ones are registered with the United States Trademark and Patent Office (USPTO). As the names go, states trademarks offer branding assets protection statewide, while Federal trademarks offer protection nationwide.

LLCs are usually registered in the state where business is conducted. The process of registration varies by state. Some states let you register online or by sending papers by mail. Some others want you to register Secretary of State's Office. Let it be any state; using a registered agent simplifies the process. The processing time also varies by state. In some states, it is just one week; in others, it is 5 weeks. However, almost all the states offer express processing time services for a fee(50-100) which can speed up the process.

3. Filing Fees and Criteria

LLC: Like the registration processes, the registration fee varies by state.  It can range from USD100 - USD500. As for criteria, most Secretary of State's Offices asks for a Name Reservation Certificate before forming an LLC. Also, they need to know if you want to be a Domestic LLC or a Foreign LLC.

Trademarks: The USPTO registration process might take a few months to 1 year. You need to have a business formed (LLC, Corporation, Solo-Proprietorship, Partnership). Also, you need to know if you want a character trademark or a special form trademark. Registration fee might vary from $200 to $350.

4. Long waiting process

The Trademark registration process can take a long time, especially if there are any objections from other businesses. It’s important to start the process as soon as possible and to be prepared for a long wait. However, the Trademark will be worth it in the end. 

Unlike Trademarks, LLCs can be formed in 1-5 weeks time depending on the state they are registered in.

5. Protection:

In addition to protecting business owners' personal assets, the LLC registration process has a procedure to make sure two different LLCs have distinct names.

Though it sounds like a trademark, it is merely a trademark because of the following reasons.

1. Two different LLCs in the same state can have similar names with changes in the spelling of the business names.
2.  It is only state-wide protection. There can be an LLC with the same name in other states.
3.  They don't offer any trademark rights. In the USA, trademark rights come into play only when businesses start using the Trademark for business operations and proceedings.

Trademark registration offers all the above missing things.

1. They make your brand identity unique. Starting from colours, shapes, sizes, fonts, and spellings, there is no other brand hovering over trademark brand style.
2. Federal Trademarks are meant to make your brand unique across the country.

Should I go with LLC or Trademark First?

When starting a business, the most common question beginners face in the context of LLC and Trademarks is "LLC First or Trademark First?" 

The order of registration should be the first LLC and then Trademark. The reason for that- trademark should belong to the LLC rather than a person. 

Bottom Line

At the core, LLCs and Trademarks are very different things.

An LLC is a business structure. You can register a business as an LLC business entity, and it separates the owner's wealth from the company registered as an LLC. In short, it shields the personal property of the owner from the losses of the LLC

A Trademark makes sure that no other person, brand, or company is legally using your registered symbol, logo, name, or phrase to represent a business. It provides brand identity ( like a unique identifier) for a business, company, product, or service.