Should I Change My Company's Name?
In addition, if your goal is to build up business credit in one entity, forming a new one would seem counterproductive, as you'd only have to start all over again with that new entity. The name of the company alone is not really a factor in determining the credit-worthiness of a company.
What could be a factor is the nature of the business you currently have (and for which you're trying to build the credit) and whether that's similar to the business you want to buy. If not, any proposal you make to the bank to obtain a loan or other line of credit will have to explain why you and the company are a "safe bet" in this new line of business.
You'll want to sit down with your banker (assuming you intend to apply for bank financing) to get to know the bank's criteria for offering financing when it comes to buying a business. You may well need it if your new company doesn't have enough assets on its own to purchase a business.
Be sure to have worked out some kind of business plan, as that will give your banker some degree of comfort level that you have a sound strategy for using the money and repaying it.
Related: Step by Step Guide to Forming a Limited Liability Company
Related: How to Name Your Business
Related: How to Buy a Business
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.