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What’s the Difference Between a Business Name, Trading Name & Legal Name?

What’s the Difference Between a Business Name, Trading Name & Legal Name?

A business name, trading name & legal name have different purposes and you'll need to register them at different times. Find out more here.

26th February 2021
Reading Time: 3 minutes

Key points

  • Find out in this article the difference between a business name, trading name & legal name
  • A business name and trading name are the same thing. The term ‘business name’ has replaced ‘trading name’.
  • A legal name is the legally registered name for your business
  • The legal name of sole traders and partnerships are their personal names, unless a separate business name is registered
  • Companies can register formal legal company names, as well as business names

Introduction

When you start a business, it can be hard to know which names are legal, informal and link directly to your business. In this article, we’ll explain what the difference is between a business name, trading name & legal name.

Business Names

‘Trading name’ is an outdated term. 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).

Examples of when you should register your business name

  • Tessa Scott owns a florist business as a sole trader. Her legal name is Tessa Scott and she wants to promote her business under the name ‘Tessa’s Fresh Flowers’.
  • Sean Kang and Dominic Jones run a construction business together, operating as a partnership. The formal legal name of their venture is Kang, S & Jones, D. In order to run their business as ‘Eagle Constructions’ they must register a business name.
  • A Pty Ltd company is registered with ASIC under the name Aaron Anderson Pty Ltd. However, the company wants to operate under the name ‘AZ Solutions’. In this case, they have to register a separate business name.

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 I register it?

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.

Trademark protection

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 .

Don’t know where to start?
Contact a Lawpath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

Author
Dominic Woolrych

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.