b. How we removed the naming speedbump
With the filing itself now fully automated, the only other speed bump left was the name.
When forming a new LLC, including a Series LLC, any name can be chosen (with some exceptions) provided it is not already taken. For instance, try filing
Goldman Sachs LLCand the name will be rejected after a name check by the Registry.
In the context of a Series LLC, there is no Certificate of Formation filed with Delaware hence no way for the Registry to perform a namecheck.
Whilst trademark law provides a natural defense against anybody duplicating a registered name and risk legal action as a result, it would hence still be possible to register
Goldman Sachs LLCas a Series LLC.
The way some other U.S. States that have Series LLCs deal with this is by imposing naming restrictions. For instance, in Wyoming
Goldman Sachs LLCcould not be used as a standalone name and would have to be referred to as
Goldman Sachs LLC, a Series of OtoCo LLC
However, there seems to be no such naming restriction in Delaware, even though the above naming is typically adopted as a convention.
Also, we did not want our users to have to adopt this naming convention and refer to their Series LLC as a "Series of OtoCo LLC".
The solution was to use an API to perform a live namecheck as a first step in the online order process.
Whilst Delaware is one of the many States in the US that does not have an API into its State Registry, there are third-party databases such as Open Corporates which provide a reasonable degree of accuracy.
Thanks to this live namecheck, users can instantly spin up their LLC with the name of their choice. This prevents naming conflicts and possible lawsuits as a result. In a next iteration of OtoCo, we will query all smart contracts used to spin up OtoCo's to prevent users from registering their LLC with a name that has already been taken.