When starting a business, there are several questions you need to ask yourself. One of the most important questions is whether to get a trade name or business name. While these two terms may sound similar, there is a big difference between them.
What is a trade name?
A trade name is a unique name that identifies your business. It can be your personal name, the name of your company, or a combination of both. For instance, “John Smith Plumbing” is a trade name. Trade names are often used to create an identity for a business, and they can be registered with the government. Sometimes, Doing Business As (DBA) names are also referred to as trade names due to the similarity in how they are used. For instance, “John Smith Plumbing” would be the DBA name for the company “Smith and Sons Plumbing.”
While a trade name can be registered with the government, it is not required. In fact, many businesses operate without registering their trade names. However, there are some benefits to doing so. For instance, registering your trade name can help to prevent other businesses from using it. It can also make it easier to open a business bank account and get business insurance.
One of the main benefits of having a trade name is that it can help you build brand recognition. Customers will be able to easily identify your business, and this can lead to more sales. Secondly, a trade name can also help you protect your business from infringement. If someone tries to use your trade name, you can take legal action against them.
What is a business name?
A business name is the legal name of your company. It is the name you will use on your official documents, such as your tax return. Your business name will also be used if you decide to incorporate your business. The main difference between a trade name and a business name is that a trade name can be registered with the government, while a business name cannot.
One of the benefits of having a business name is that it can help you build credibility with customers and suppliers. A business name can also make it easier to open a bank account and get credit from lenders.
Another benefit of having a business name is that it can help you avoid personal liability. If your business is sued, the only asset that can be seized is the business itself. This means that your personal assets, such as your home or car will likely be safe.
How do you get a business name?
The first step in getting a business name is to choose one that is available. You will need to check with your local government to see if the name you want is available. Once you have chosen an available business name, you will need to register it through the Small Business Administration.
The process of registering a business name can vary from country to country. In the U.S., you will need to fill out an application and pay a fee. Once your business gets registered, you will be able to use it for your business.
What legal issues would trade names have?
There are a few legal issues that trade names would have. The first issue is that someone else could already have registered the same or similar name. This could cause confusion for customers, and it could also lead to legal problems down the road. If you choose a trade name that is too similar to another business, you could be sued for trademark infringement.
Another legal issue with trade names is that they are not protected by law. This means that anyone can use your trade name without permission. If you want to protect your trade name, you will need to register it as a trademark.
Overall, there are both benefits and drawbacks to using a trade name for your business. It is important to weigh all of the factors before you decide whether or not to use a trade name. If you do decide to use a trade name, be sure to register it with the government to protect your business from infringement.
