What is the Difference Between Business Name and Trading Name?
🆚 Go to Comparative Table 🆚The difference between a business name and a trading name lies in their purpose and usage.
- Business Name: This is the legal and official name of a company, which is registered with the government and appears on all official documents, such as tax filings and employee ID paperwork. A business name usually includes the designation "Inc." for corporations or "LLC" for limited liability companies.
- Trading Name: Also known as a DBA (doing business as) name, a trade name is the front-facing name that customers and clients know your business by. It is commonly used for marketing, sales, and advertising purposes. A trade name does not need to include additional words or legal phrases, such as "Corp" or "LLC".
Some key differences between business names and trading names include:
- A trade name is not mandatory, and some companies may choose to use their legal name as their trade name.
- Registering a trade name does not usually provide legal protection, as it is more of a publicly used name.
- A trade name can be used by multiple businesses, even if one business has it registered.
- A business can have both a legal or registered name and a trade name, with no separate registration required for the legal name.
In summary, a business name is the official name registered with the government, while a trading name is the publicly used name for marketing and advertising purposes. Businesses may choose to have their business name and trade name be the same or opt for different names.
Comparative Table: Business Name vs Trading Name
The difference between a business name and a trading name lies in their usage and legal implications. Here is a table comparing the two:
| Business Name | Trading Name |
|---|---|
| Legal name of the company registered with the government. | Name used by the business for marketing, sales, and day-to-day operations, which can be different from the legal name. |
| Appears on legal documents, government forms, and official paperwork. | Generally appears on advertisements, signs, and other marketing materials. |
| Required for corporations and LLCs, and it includes legal designations like "Inc." or "LLC". | Does not need to include additional words or legal phrases (e.g., Corp, LLC, etc.). |
| Registered with the appropriate government agency, such as ASIC in Australia. | Does not need to be registered, but if used, it must comply with trademark and "passing off" laws. |
A business can have both a legal business name and a trading name, and they may be different from each other. The legal business name is used for formal purposes, while the trading name is used for marketing and day-to-day operations. It is essential to register the legal business name with the appropriate government agency, but the trading name does not necessarily need to be registered. However, if a business chooses to use a trading name, it must comply with trademark laws and avoid infringing on other companies' trademarks.
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