Reselling Names | Lovie — US Company Formation

The concept of 'reselling names' is broad and can encompass several distinct business activities. At its core, it involves acquiring a name or identifier and then selling it to another party for profit. This can range from digital assets like domain names and social media handles to intellectual property such as business names and trademarks. Understanding the nuances of each type of name reselling is crucial for aspiring entrepreneurs looking to enter this market. It requires diligence, market research, and a solid understanding of legal frameworks to ensure legitimate and profitable transactions. For many, reselling names presents an attractive entrepreneurial path due to its relatively low barrier to entry compared to some traditional businesses. However, success hinges on identifying valuable names, understanding market demand, and navigating the legal requirements involved. Whether you're interested in domain flipping, acquiring and rebranding existing businesses, or brokering trademark sales, a foundational understanding of business formation principles is essential. Lovie can help you establish the legal structure needed to operate your reselling business efficiently and compliantly across all 50 US states.

Domain Name Reselling: The Art of Domain Flipping

Domain name reselling, often called domain flipping, is perhaps the most well-known form of reselling names. This involves purchasing domain names that you believe have future value and then selling them for a profit. The value of a domain name can be derived from its brandability, keyword relevance, length, or its potential to attract organic traffic. For instance, a short, memorable, and keyword-rich domain like 'autoinsurance.com' is far more valuable than a long, obscure string of characters

• Domain flipping involves buying and selling domain names for profit.
• Value is determined by factors like memorability, keywords, and length.
• Marketplaces like GoDaddy Auctions and Sedo are primary trading platforms.
• Researching trends and trademarks is crucial for success and avoiding legal issues.
• Forming an LLC or S-Corp can protect personal assets in your domain reselling business.

Reselling Existing Business Names and Companies

Reselling existing business names, or even entire businesses, is another facet of this market. This often involves acquiring a business that is no longer operational or is being sold by its owner, and then rebranding or reselling its name and associated assets. The value here lies in the established goodwill, existing customer base, or proprietary assets that come with the name. For example, acquiring a defunct but well-regarded local business name could allow a new entrepreneur to leverage its

• Reselling business names can involve acquiring defunct businesses or established brands.
• Value is often tied to goodwill, customer base, or proprietary assets.
• Thorough due diligence on financial and legal standing is essential.
• Legal transfers require specific agreements and filings.
• Forming an entity like an LLC or C-Corp simplifies acquisitions and resales.

Trademark Reselling, Brokering, and Licensing

Trademarks represent brand names, logos, or slogans that identify and distinguish the source of goods or services. Reselling or brokering trademarks can be a lucrative venture, but it operates within a strict legal framework governed by the U.S. Patent and Trademark Office (USPTO). Unlike domain names, trademarks are not simply bought and sold in a free market. Ownership transfer, known as assignment, must be recorded with the USPTO and requires that the goodwill associated with the mark be tran

• Trademarks are legally protected brand identifiers.
• Assignment requires transferring goodwill; simple sales can be invalid.
• Brokering involves facilitating deals, often for a commission.
• Licensing allows use of the mark for royalties, requiring strong agreements.
• Forming an entity is crucial for legal compliance and professional brokering.

Key Legal Considerations for Reselling Names

Operating a business that involves reselling names requires careful attention to legal details across various domains. Trademark infringement is a primary concern. Purchasing or selling a name that is confusingly similar to an existing registered trademark can lead to cease-and-desist letters, lawsuits, and significant financial penalties. It's essential to conduct thorough searches using the USPTO's TESS database and state trademark registries before acquiring or listing any name for resale. Fo

• Avoid trademark infringement by conducting thorough searches.
• Use clear, written contracts for all name transfer transactions.
• Understand and comply with business registration and DBA requirements.
• State-specific regulations vary; research applicable laws.
• Forming a legal entity provides liability protection and professionalism.

Structuring Your Name Reselling Business with Lovie

Establishing a formal business entity is a critical step for anyone serious about reselling names. It provides a legal framework that separates your personal assets from your business liabilities, a crucial protection in a field that can involve significant financial transactions and potential legal disputes. Lovie specializes in helping entrepreneurs form various business structures, including Limited Liability Companies (LLCs), S-Corporations, and C-Corporations, across all 50 US states. Each

• Forming an entity like an LLC or S-Corp protects personal assets.
• LLCs offer pass-through taxation and liability protection.
• S-Corps can provide tax advantages on salaries and distributions.
• Lovie handles state filings and EIN acquisition.
• Registered Agent services ensure compliance with official document delivery.

Frequently Asked Questions

Can I legally resell any domain name I find?

No, you cannot legally resell any domain name. You must ensure the domain does not infringe on existing trademarks or copyrights. Purchasing or selling a domain that violates intellectual property rights can lead to legal action and loss of the domain.

What is the difference between reselling a business name and buying a business?

Reselling a business name might involve acquiring just the name and associated brand equity, potentially without operational assets. Buying a business typically includes acquiring all assets, liabilities, operations, and the name associated with it.

Do I need an EIN to resell domain names?

If you form a business entity like an LLC or corporation, you will generally need an EIN from the IRS for tax purposes and to open a business bank account. Sole proprietors without employees may not need one initially, but it's highly recommended for professional operations.

How do I transfer ownership of a domain name after selling it?

The transfer process varies by registrar but generally involves both the buyer and seller initiating the transfer through the registrar's platform. This often includes providing authorization codes and confirming the transfer.

What are the risks involved in trademark reselling?

Risks include invalidating the trademark assignment if goodwill isn't transferred, facing infringement lawsuits if the mark is too similar to another, and difficulties in valuation and finding buyers or licensees.

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