Various names relate to the operation of a company or business and it can be hard to keep track! Some terms like a ‘trading’ and ‘business’ name can be interchangeable. But others mean very different things and attract different legal rights. It is important that you understand what each term means so that you use the right name in the right situations, and meet your obligations accordingly.
What’s the difference between a trading name and a business name?
There is no difference between a trading name and a business name, but there is a difference between a trading name and a registered business name. A trading name and a business name are terms used to describe the title that an entity or individual trades under.
The Australian Tax Office collected trading names and displayed them on the Australian Business Register up until 28 May 2012. The ABR still displays these names, but they are no longer collected or updated. These names will stay on the register until 31 October 2018 and then they will be removed.
Trading names can now be considered business names. You will need to register your Business name with the Australian Securities and Investments Commission (ASIC) if you are trading under a name that is different from your legal name. Your legal name can be either your individual name if you are a sole trader or a company name. Registering the name allows your customers to identify the owner of the name, and means more transparency.
Choose and register your business name carefully, as you cannot make changes once it is registered. If you do want to update the name, you will have to cancel the current name and register a new name. You could also keep the old one (just in case!) and register a new name with the updated version.
What about a company name?
A company is a legal entity that is registered with ASIC and, as such, your company name will be a legal name. You can trade under your company name, but if you choose to trade under a different name, you will be required to register a business name. Company names are usually required to include proprietary (“pty”) and/or limited (“ltd”) at the end. If you want to trade under your company name without “pty” or “ltd”, you may have to register a business name.
A brand name
You will often use a brand name in relation to a trade mark. This is because the business will be seeking to protect their business name, logo or slogan by ensuring only they can use it in relation to their business activities.
Brand names and trade marks can be licensed to other businesses so that they can use part of the name in their own business name. If this is the case, each of those businesses will need to register a business name with the trade mark and distinguish it with another word or phrase. You will commonly see this with franchises, where franchisees register their business name by “Franchise name + Suburb name”.
If you have any questions about the different types of names your business may need, or require assistance in setting up a business, you should speak with one of LegalVision’s experienced business lawyers on 1300 544 755.
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