(This article appeared in Journal 28,1, Spring 2023)
You’ve decided to hang up your shingle as a solo practitioner or maybe with a few associates. Now you have to decide exactly what to put on that shingle. Although it might not be as career-defining as naming your newly formed garage band, there are several factors you need to consider to ensure that your law firm name complies with the Rules of Professional Conduct as well as other statutory requirements.
Keeping it Simple
For a solo practitioner who does not want to incorporate his practice, the process of naming a law firm may be relatively simple. For example, lawyer Davy Jones may decide to name his law firm “The Davy Jones Law Firm” with the intention of using that name for all his business practices. For Mr. Jones, there are no further requirements regarding his law firm name.
Incorporation
If Mr. Jones wants his law practice to operate as a professional corporation or a professional limited liability company, matters get a bit more complicated. Mr. Jones will need to register his professional entity with the North Carolina State Bar and then with the North Carolina secretary of state. Both the State Bar and the Secretary of State’s Office have specific naming requirements for professional entities.
Mr. Jones needs to file the entity’s articles of incorporation or articles of organization, along with an application for registration, with the membership department of the State Bar and pay a registration fee of $50. Applications can be found on the Forms page of the State Bar’s website under the Professional Organizations heading.
Applications will not be approved if the entities name does not comply with the State Bar’s naming requirements for professional organizations as set out in 27 N.C. Admin. Code 1E .0102. Briefly, the organization’s name must contain the surname of one or more of its shareholders (Professional Corporation) or members (Professional Limited Liability Company) and nothing more, except for punctuation marks, conjunctions, and the entity designation. The name of a professional corporation must end with the following words: (1) “Professional Association” or the abbreviation “PA”; or (2) “Professional Corporation” or the abbreviation “PC.” The name of a professional limited liability company must end with the words Professional Limited Liability Company or the abbreviations “P.L.L.C.” or “PLLC.” In addition, the name may reference the generic service being rendered. For example, Davy Jones Law, PC; Jones Law Firm, PLLC; Davy Jones Law Office, PA; or Jones Legal, PLLC are all acceptable professional organization names.
After properly registering the professional entity, the Bar will provide Mr. Jones with a certification form (PC-2 or PLLC-2) approving the formation of his professional corporation or professional limited liability company. Mr. Jones will need to file the certification form and the original articles with the Secretary of State’s Corporation’s Division pursuant to the Professional Corporation Act, N.C. Gen. Stat. § 55B. The Professional Corporation Act regulates the permissible designation endings for professional corporations and professional limited liability companies. Subject to limitations imposed by the licensing acts of the respective professions, the same standards of the business corporation name availability rules apply to professional corporation name availability; however, professional corporations may use the words “Professional Association,” “PA,” “Professional Corporation,” or “PC,” in lieu of the corporate designations specified in N.C.G.S. 55D-20(1). In addition to the standards governing the name of limited liability companies, professional limited liability company names must contain the word “Professional” or the abbreviation “P.L.L.C.” or “PLLC.”
When registering a professional entity with the Secretary of State’s Office it is important that the name set forth in the Articles of Incorporation or Articles of Organization are stated in the exact same manner as it appears on the PC-2 or PLLC-2 that the State Bar issues. This inconsistency is a common reason for document rejection by the Secretary of State’s Office. Once processed by the secretary of state, Mr. Jones will receive filed/date stamped articles. Mr. Jones needs to submit a copy of the filed/date stamped articles to the Bar to receive his Certificate of Registration Form (PC-3 or PLLC-3).
Name Changes
It is possible that a lawyer may subsequently have to make changes to his organization’s name due to changes in the membership of the organization. If a shareholder or a member whose surname appears in the name becomes legally disqualified to render professional services in North Carolina or, if the shareholder or member is not licensed in North Carolina, or in any other jurisdiction in which the shareholder is licensed, the name shall be promptly changed to eliminate the name of the shareholder or member. If a shareholder or a member whose surname appears in the name becomes a judge or other adjudicatory officer or holds any other office which disqualifies the shareholder or member to practice law, the name shall be promptly changed to eliminate the name of the shareholder or member. Changes in the organization’s name are generally not required due to a shareholder or member’s death, retirement, or inactivity due to age or disability.
If changes are necessary, the lawyer will need to complete Amendment to Articles Form L-17 for a PLLC or Form B-02 for a PA/PC. These forms are located on the secretary of state’s website. The forms need to be submitted to the State Bar’s membership department with a $20 administration fee. If the forms are in order, the State Bar will return the forms to the lawyer with a “non-objection letter.” The letter and the forms then need to be submitted to the secretary of state. The Secretary of State’s Office will return a file-stamped copy of the amendment form to Mr. Jones. Mr. Jones needs to submit the file-stamped copy of the amendment form to the Bar to receive an updated certificate of registration.
Trade Names
What if Mr. Jones decides he would like to use a catchy name for his law firm such as “The Far Out Groovy Law Firm”? A lawyer or law firm may be designated by a trade name so long as the designation is not false or misleading. See Rule 7.1. A law firm name is misleading if it implies a connection with: (1) a government agency; (2) a deceased or retired lawyer who was not a former principal of the firm, or a retired member who has not ceased the practice of law; (3) a lawyer not associated with the firm or a predecessor firm; (4) a nonlawyer; or (5) a public or charitable legal services organization. See Rule 7.1, cmt. [5]. In addition, a trade name may not compare a lawyer’s services with others, create an unjustified expectation about results, or imply that the lawyer can achieve results by means that violate the Rules of Professional Conduct. See Rule 7.1. It is also considered misleading to use a designation such as “Smith and Associates” for a solo practice. See Rule 7.1, cmt. [7]. Although not referenced in the Rules of Professional Conduct, N.C. Gen. Stat. § 66-71.5, provides that a trade name may not include a professional entity designation such as PC, PA, or PLLC. Therefore, Mr. Jones would not be permitted to use the trade name “The Far Out Groovy Law Firm, PLLC.”
It is important to note that trade names no longer need to be registered with the State Bar. The requirement to register trade names with the State Bar (found in former Rule 7.5) was originally implemented to save lawyers time and money due to the requirements of the Assumed Business Name Act. As readers are likely aware, prior to December 1, 2017, the former Business Under Assumed Name Regulated Act (N.C. Gen. Stat. § 66-68, et al., (repealed 2017)) required the filing of a certificate of assumed/trade name with the register of deeds in each county in which business was conducted under an assumed name unless a licensing board with jurisdiction over the business’ services had implemented its own central registration process for assumed business names. This meant that a law firm with a four-county practice had to register its trade name with each county’s register of deeds unless the State Bar maintained its own central registration process (which it did, thereby saving lawyers the potential headache of registering in multiple counties). However, as of December 1, 2017, amendments to the statute established a statewide, online, searchable database containing assumed business name filings. Notably, the statute now allows filers to designate multiple counties for conducting business on one filing. See N.C. Gen. Stat. § 66-71.4. With the statute resolving the multi-county registration requirement, the State Bar’s previous trade name registration requirement became procedurally unnecessary; thus, the registration requirement—which was entirely unique to North Carolina—was eliminated during the overhaul of the Rules of Professional Conduct related to advertising in May 2021. Accordingly, Mr. Jones will still need to file a certificate of assumed name with the register of deeds in one county in which he will be engaged in business under the trade name, but he may include all the counties in which he will conduct business in that single filing pursuant to N.C. Gen. Stat. § 66-71.4. And, of course, Mr. Jones will still need to use a trade name that is not false or misleading pursuant to Rule 7.1.
Conclusion
Several sets of rules govern the permissibility of names associated with a law firm: the governing rules of the State Bar, the naming requirements of the Secretary of State’s Office, the Rules of Professional Conduct, and the statutory requirements for assumed business names. Although the process may seem complicated, help is available. Questions on the Bar’s registration procedures may be addressed to Phillip McWilliams (pmcwilliams@ncbar.gov). Questions on the secretary of state’s registration procedures may be addressed to Darron Jones (djones@sosnc.gov). Questions on whether a trade name is permissible under the Rules of Professional Conduct may be sent to ethicsadvice@ncbar.gov.