A lot of new business owners and entrepreneurs often get confused between the various types of names that a company has. A business (legal) name and trade name are the two most important names for a business and every entrepreneur should know about these.

Want to know how these differ and which one should you use?

In this post, you will find answers to that and much more. This post will end the business (legal) name vs. trade name debate once and for all.

Let’s get started.

What is a Business Name?

A business name is the legal name or the official name of a company, as registered on the government forms and legal documents.

When you register your business, the name that you use for all official purposes like filing for your Employer Identification Number (EIN) or Tax ID is your legal business name.

There are certain guidelines that you need to follow when choosing a business’s legal name.

For example:

  • A Sole Proprietorship will have the owner’s full name in the business (legal) name.
  • A general Partnership usually has the last names of all partners in the business name.
  • When you register an LLC (Limited Liability Company), your business name might need to include, “LLC.”

Please note that these requirements may differ from one state to another. You need to check the naming requirements for registering your business name with the state and local authorities.

What is a Trade Name?

A trade name is your company’s brand name that you use for all marketing and advertising purposes. It is also sometimes referred to as the “doing business as (DBA)” or fictitious business name, as you conduct your business using your trade name and not the legal name.

Your business’s trade name is the name that your customers recognize.

Trade names do not need to follow the same naming conventions like using the terms, “LLC,” “Corporation,” etc. You can choose a short and crisp trade name with which to do business.

Business (Legal) Name vs. Trade Name: Which One Should You Use?

Whether you want to conduct business using your legally registered trademark name or a trade name is completely up to you.

However, using a trade name offers certain advantages for all businesses, regardless of their entity type.

Trade names can be much shorter than a registered business name and are likely to be more memorable for your customers. It is also beneficial to use trade names if your company has several separate businesses that operate as a part of the larger company.

If you choose to use a trade name, you need to register it as a DBA (doing business as) per your state guidelines.

You can use our services for a quick DBA filing and make the process quicker and easier. We will handle the filing process end-to-end and take care of all of the boring paperwork for you.

FAQs

1. Are business names (legal names) and trade names the same thing?

No, a business name is your company’s legal name while a trade name is the one you use for your day-to-day activities and marketing purposes. A trade name is also the name that your customers know and recognize your business as.

Every business has to register a business name but using a DBA or trade name is completely optional.

2. Why do businesses use a trade name?

Businesses generally use a trade name if:

  • Their business name is too long or does not accurately describe what they do.
  • They operate several businesses under a large company and need a trade name for each of them.

This does not mean that a small business can’t use a trade name.

3. What do you mean by “doing business as” or DBA?

Doing business as or DBA refers to the name that a company uses for its day-to-day business operations and marketing purposes. It is also known as the trade name, assumed name, or fictitious name of the business.

4. Do all businesses have a separate trade name?

No, using a trade name is a choice and not all businesses make that choice.

There are many businesses that use their legal business name to conduct business.

5. How can I register a trade name for my business?

To register a trade name for your business, you will need to file for a DBA.

The process of filing for a DBA varies from one state to another and sometimes from county to county. However, there are certain steps that remain common.

Here is the general process that you can follow to register a DBA or trade name:

  • Find out the DBA filing requirements from your state and local authorities.
  • Identify whether you need to file at the county clerk’s office or another office.
  • If you have an LLC or a Corporation, get a certificate for “good standing” from your state, as it is required in some states.
  • Obtain an EIN (Employer Identification Number) or tax ID.
  • File the required forms for your state or county and pay the filing fee using acceptable methods of payment.
  • Announce your DBA by releasing a fictitious name statement in a local newspaper, if mandated by your state or county.
  • Wait for your forms to be processed and start using the trade name when it’s done.
  • In some states, you will need to renew your DBA filing every five years, so keep a check on that.

You can use our DBA filing services to make the process easier. We will handle all of the paperwork and regulatory requirements on your behalf.

Conclusion

Choosing a good business name is very important. Make sure it represents what your business does in the right way.

If you change your mind or feel like you need a better name, you can always use a trade name later. If you have several small businesses operating under one large company, you can even use multiple trade names.

Just make sure that you register your trade names and follow all of the necessary steps to file for a DBA.

Do you need help filing for a DBA for your business? Reach out to our experts and let us handle the process for you.

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