Trade Name Vs Business Name
Whatever the case may be, sometimes you need to shake things up with your business name to have it align with the changes you are making to your company. What you call your business can make or break your company’s success. Sure, there are a lot of things that play a role in how successful your business is. Numbered companies will very often operate as something other than their legal name, which is unrecognizable to the public. In Brazil, a trade name is known as a nome fantasia (‘fantasy’ or ‘fiction’ name), and the legal name of business is called razão social (social name).
It depends where you are, so you’ll want to look up your local laws and get in touch with an expert to make sure. When you start an LLC or corporation, you’ll need to list your company’s name when you file paperwork with the state. However, the business name doesn’t necessarily have to be the customer-facing name that you use. This is what the trade name is, or the DBA (doing business as) name. Knowing the difference between a trade name and a business name is important. Further, trade names must be recognizable so that the trading company can be contacted if safety questions arise.
Although a trading name doesn’t provide any brand name protection, the process of trade name registration is an essential step in a company’s branding. The laws on requirements for trade name registration may vary across states, but most require the companies to register their business either with the local government or through the county clerk’s office. Registering a trading name for a business is primarily done for administrative and accounting purposes, such as filing a corporate tax return with the tax department. The Small Business Administration (SBA) website provides search tool for the specific trade name registration requirements in each state. Registration requirements for trade names are really geared more toward making the tax collection agencies aware of your business than they are toward providing any substantial brand name protection. The primary motivation for businesses to register a trading name is to make tax collection agencies aware of their existence rather than provide brand name protection.
Although most people know what LLC or Inc. or Co. means, it can feel cumbersome at the end of a clever business name. After you decide what to name your business and check its availability, register the name with your state. It’s up to the business to determine whether or not it can benefit from using a trade name in place of their legal business name.
A trade name is a public-facing name used by a company to identify itself or to identify a product or substance that it either sells or utilizes internally. Get up and running with free payroll setup, and enjoy free expert support. Typically, a business will have both a legal business name as well as a trade name. The legal one, as mentioned, appears on legal documents and government forms.
Do You Know the Difference Between a Business Name vs. Trade Name?
Two famous examples were King Perekule VII of Bonny, who was known as Captain Pepple in trade matters, and King Jubo Jubogha of Opobo, who bore the pseudonym Captain Jaja. Both Pepple and Jaja would bequeath their trade names to their royal descendants as official surnames upon their deaths. A company typically uses a trade name to conduct business using a simpler name rather than using their formal and often lengthier name. Trade names are also used when a preferred name cannot be registered, often because it may already be registered or is too similar to a name that is already registered. Switching your business name requires a little legwork on your end.
- Filing a trade name does not establish a new business–a trade name is simply a nickname for the business you already have.
- Sole proprietorships and partnerships typically need to file a DBA if they’re using a name other than their own last names.
- Both Pepple and Jaja would bequeath their trade names to their royal descendants as official surnames upon their deaths.
- This is what the trade name is, or the DBA (doing business as) name.
- The business name is the legal name that your business filed with your state when you set up your LLC, corporation or other business structure.
No matter what name you choose, you want to make sure it communicates what you do in a fun and memorable way. When coming up with a business name to file legally, make sure you have a few backups in case your first choice is taken. The trade name can give you a little more choice, depending on where you are and what the local and state laws allow. It is the name that clients and customers know your business as in the “real” world, as opposed to the legal filings with the government.
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On the other hand, a trade name generally appears on advertisements and signs. When it comes to what you call your company, you need to know whether it’s more beneficial to use your business name or trade name. Find out the difference between business name and trade name below. A trade name can also give you the freedom to try out new product or service lines under a different name without setting up a new company. Having a trade name can be good idea if your trade name is easier for customers to say and remember.
- Registering a trade name also means you can accept payments that are addressed to either your legal business name or your company’s trade name.
- However, some states require LLCs and corporations to include “LLC” or “Corporation” in their legal name (e.g., Rockwell Technology LLC).
- You do have to register to use the trade name, but that does not usually give you the exclusive rights to the name.
- Some require a separate fee and application for each DBA you register.
- Read on to learn more about business name vs. trade name and how they contrast.
Typically, the customers and clients of a business know it by its trade name only. Deciding what to call your business is not as easy as it may sound. The name of your company tells consumers a lot about your business. So, you need a name that is unique, memorable, and attention-grabbing. It is necessary to search available names in the state where you’re filing. It’s always possible that your first choice will have been taken, so you should come prepared with a few backup options for your LLC or corporation.
National hazard communication standards are becoming increasingly globally harmonized to ensure that information on hazards does not become obscured as products are traded across borders. A trade name is the front-facing name that customers and clients know your business as. This is why it’s also called a DBA name—the name you’re “doing business as.” A lot of businesses will have their registered business name with the “LLC” or the “Inc.” dropped as their trade name. For example, the Trader Joe’s business name is Trader Joe’s Co., but their customer name will always be Trader Joe’s.
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When you find the perfect business name to set up your company, you have to make sure that it isn’t already being used by another business in your state. Before filing all of the necessary business paperwork, you can place a hold on a name you want for a small fee in most states. However, your business won’t officially be formed with the name you’ve chosen until you file business formation documents. The franchisee will have a legal name under which it may sue and be sued, but will conduct business under the franchiser’s brand name (which the public would recognize). In Colonial Nigeria, certain tribes had members that used a variety of trading names to conduct business with the Europeans.
Virginia also requires corporations and LLCs to file a copy of their registration with the county or city to be registered with the State Corporation Commission. Although registering a trading name for a business doesn’t provide any legal protection, the trade name selection should still be carefully selected. The reason is that it is a business’s initial step to establish its identity in the marketplace. Filing a trade name does not establish a new business–a trade name is simply a nickname for the business you already have. Requirements vary by state and locality, but you’ll usually need to file a trade name if you’re using any name other than your LLC or corporation’s official legal name. Sole proprietorships and partnerships typically need to file a DBA if they’re using a name other than their own last names.
This means not only .com, but perhaps .org, .biz and other (TLDs). The fact that a trade name is typically not unique can cause problems for your business if someone chooses to use the same trade name. You do have to register to use the trade name, but that does not usually give you the exclusive rights to the name. However, in some states, registering a trade name gives you exclusive access to it.
Requirements of a Business Name
Before you decide to use a trade name instead of your legal name for business, consider the following pros and cons of using a trade name. Download our free guide to get the resources and checklist you need to start a business. Julia is a writer in New York and started covering tech and business during the pandemic.
Paying a fee every time could be a financial barrier to having a trade name that is separate from your legal business name. Sometimes, the business’s trade name differs from its legal name. If a business owner wants to operate under a different name other than the company’s legal name, they can use a trade name instead. If you are an owner of a general partnership, the business name is typically a combination of the last names of the partnership’s owners and must be included in the partnership agreement. One of the first things you do as a business owner is choose a business name. Read on to learn more about business name vs. trade name and how they contrast.
A trade name does not need to include additional words or legal phrases (e.g., Corp, LLC, etc.). For example, a company’s trade name is Mike’s, but their legal business name is Mike’s Corporation. A business can opt to have their business name and trade name be the same. Your business name is one of the first things potential customers notice about your company. With a good business or trade name, your business is one step closer to being successful. Like any aspect of your business, it is important to do research on the process of picking a name and what is available to you.
However, you must include your full personal name if you have a sole proprietorship. Some states require you to refile for the right to use your trade name as your front-facing name in conjunction with your legal business name. It’s important to keep up to date on these filings so you’re not inadvertently hampering your ability to do business under your trade name.
A trade name may be completely different than your official business name, or it may just drop the businesslike legalese ending (LLC or Inc.). Registering a trade name also means you can accept payments that are addressed to either your legal business name or your company’s trade name. This makes it easier for clients and vendors because they don’t have to differentiate between your trade name and business name for payments.