What’s The Difference: Business Names, Trading Names and Legal Names
Need some help distinguishing between business, trading and legal names? Look no further, here is a guide that offers all the information necessary to understand these names.
What’s the difference between a business name and a trading name?
‘Trading name’ is an old term, and now ‘trading name’ and ‘business name’ can be used interchangeably. ‘Business name’ is the newest and most correct term, so it’s the term we’ll use throughout this guide. Business name refers to the title your business operates under. Your business name helps customers find, identify and connect with your business. You can have multiple business names linked to your Australian Business Number (ABN).
What’s a legal name?
A legal name is the name of the entity that appears on all official documents or legal papers. It can be different to your business name. If you’re a sole trader, your legal name will most likely be your own name. Other legal names include the name of a partnership, a proprietary limited company or an incorporated association.
Do I need to register my business name?
If you want your business to trade under a name that is different from your legal name, then you’ll have to register a business name with the Australian Securities and Investments Commission (ASIC).
Here are some examples of when you should register your business name:
- John Scott owns a florist business as a sole trader. Her legal name is Tessa Scott and she wants her business to be known as John Scott’s Flowers;
- Sean Smith and Dominic Jones run a building business together, operating as a partnership. Their partnership’s legal name is Clare Smith and Jamie Johnson and they want their business to be known as Sean and Dom’s Building; and
- A proprietary limited company is registered with ASIC under its legal name Aaron Anderson Pty Ltd. The company wants to operate under the name ‘AZ Solutions’, so it must be registered as a business name.
Here are examples of when you don’t need to register a business name:
- Carol Sheaves runs a book keeping business and operates as a sole trader. Her legal name is Carol Sheaves. Because she is happy to operate her business as a sole trader under her legal name, she doesn’t have to register her business name;
- William Davis and Geoff Rice have a panelbeating business together, operating as a partnership. Their partnership’s legal name is William Davis and Geoff Rice. They are happy to operate under their legal name, using all of the partners’ names, so they don’t need to register a business name; and
- A proprietary limited company is registered with ASIC using its legal name Heather Collins Pty Ltd. As the company will operate under the legal name, it doesn’t have to register a business name. In fact, registering the company with ASIC automatically registers the legal name as a business name.
Can I update my business name once it’s registered?
You can’t update a registered business name, even if you only want to make a slight change to it. If you want to trade under a different business name, you must register a new one. You can either:
- Cancel your existing business name (if you don’t want to use it anymore); or
- Keep your existing business name (in case you want to use it later or for a different part of your business).
Do I have to register my business name in each state and territory?
No. You only have to register your business name once. After that, your name is registered nationally.
When I register my business name, is it protected by a trade mark too?
No. Registering your business name doesn’t give you any exclusive trading, branding or ownership rights over that name. Only a trademark can offer that kind of protection. If you think your business would benefit from a trade mark, head to IP Australia to find out more.
Even though registering your business name means it’s registered nationally, it doesn’t mean that another business can’t operate with a similar name. If you require exclusive trading or branding rights for your business name, find out more from IP Australia .
Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.
Dominic is the CEO of Lawpath, dedicating his days to making legal easier, faster and more accessible to businesses. Dominic is a recognised thought-leader in Australian legal disruption, and was recognised as a winner of the 2015 Australian Legal Innovation Index.