The Difference Between Your Legal Name and Business Name

Many people are often confused by the differences between legal names, business names and trademarks. Moreover, many business owners assume that once they have chosen a business name and registered the business with the state, that they have unlimited rights to the name in conjunction with their business.

“Understand the different meanings and proper usage of terms such as ‘legal names’, ‘business names’ and ‘trademarks’ to avoid potential legal issues.”

Defining the Names You Need to Know

What is a legal name?

The legal name of a business is the name of the person or entity that owns a business. To set up a company to run your business, you must file documents with the state you choose for your business. The legal name is the name that appears in the formal documents filed with the state when you set up your company – such as in the articles of incorporation for a corporation or other organizing documents, the partnership agreement for a partnership or the operating agreement for a limited liability companies (LLCs) These names will often have a “legal ending” such as LLC, Inc. or LLP.

When should a legal name be used?

A legal name should be used in any legal documents or when communicating with the government or other businesses. For example, the legal name should be used in legal contracts, to set up bank accounts, to make purchases, when filing tax returns, buying property, or writing checks.

What is the trade name?

A business or trade name is generally considered the name a business uses for advertising and sales purposes. It is different than the legal name that appears in documents such as the articles of incorporation or other organizing documents. For example, the legal name for Starbucks may be Starbucks Coffee, Inc. while the business or trade name is “Starbucks.” A business or trade name can also be referred to as a “Fictitious Name” or a “Doing Business As” (DBA). Examples of trade names are the use of the name “Kodak” by the company whose legal name is “Eastman Kodak Company” or “McDonald’s” by the company whose legal name is “McDonald’s Corporation.” A trade name may not include Inc., LLC, Corp. or similar legal endings. Although a trade name may sometimes also be a trademark, a trade name is not, in itself, a form of intellectual property.

When should a trade name be used?

A company may use a trade name for advertising and trade purposes. It is often the name the general public sees in sales, marketing and other public efforts.

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