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Business Name vs Trading Name: Understanding the Difference

22/06/2023 by
The Marketing Team
What is the difference between a business' name, and its trading name? Keep reading this Business Kitz blog to find out! What is a business name? A business name refers to the official registered name of a company or entity. It is the legal name under which a business operates and conducts its activities. The […]

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What is the difference between a business' name, and its trading name? Keep reading this Business Kitz blog to find out!

What is a business name?

A business name refers to the official registered name of a company or entity. It is the legal name under which a business operates and conducts its activities. The business name serves as a unique identifier and is used for various purposes, including legal and financial transactions, contracts, licenses, tax filings, and official documentation.

It is an essential aspect of establishing a business's identity and allows customers, partners, and regulatory authorities to identify and interact with the business. Registering a business name is often a legal requirement to ensure compliance and prevent confusion or conflicts with other registered entities.

What is a trading name?

A trading name, also known as a "trading as" name or fictitious name, is a name under which a business operates and presents itself to the public. It is an alternative name that a business uses for marketing and branding purposes, different from its legal business name.

A trading name allows a business to create a distinctive and memorable identity in the marketplace, separate from its legal entity or parent company. It is commonly used by sole traders, partnerships, or companies that wish to conduct their business under a name that is different from their registered legal name.

Registering a trading name is not a legal requirement in all jurisdictions, but it can help establish brand recognition and facilitate effective marketing strategies.

What are the key differences?

The key differences between a business name and a trading name lie in their legal status and usage. Unlike a business name, a trading name does not have any legal standing and is not required to be registered in some jurisdictions. However, a trading name must not be misleading or confuse customers about the identity of the business.

While a business name has legal implications and is used for official documentation, a trading name is primarily used for promotional and marketing purposes to create a distinct brand identity in the marketplace.

Legal Requirements & Protection

A business name carries legal requirements and protection as it needs to be registered to establish ownership and prevent others from using the same name. It provides legal protection and allows the business owner to enforce their rights if necessary.

On the other hand, a trade name is primarily used for branding purposes and has fewer legal requirements. However, both business names and trade names should adhere to trademark laws to avoid infringement and protect consumers from confusion or misleading information.

Properly registering and managing business and trade names is crucial for legal compliance and safeguarding the reputation and identity of the business.

What are some examples?

Coca-Cola:

Business Name: The Coca-Cola Company

Trade Name: Coca-Cola

Apple:

Business Name: Apple Inc.

Trade Name: Apple

Nike:

Business Name: Nike, Inc.

Trade Name: Nike

McDonald's:

Business Name: McDonald's Corporation

Trade Name: McDonald's

Amazon:

Business Name: Amazon.com, Inc.

Trade Name: Amazon

Legal Advice

For any additional information regarding business names and trading names our highly experienced solicitors at our sister company, Legal Kitz are happy to provide you with advice that is tailored to your situation, ensuring that your concerns are addressed. You can also request to book a FREE consultation or contact us at info@legalkitz.com.au or 1300 988 954. You can also check out our Business Kitz subscription service today to begin your business with a solid foundation that ensures compliance. 

About
The Marketing Team
Business Kitz Marketing team are experts in their field. You can expect the best business guides and updates on employment law here.

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