MightyRecruiterAt this point, you have likely come to the realization that becoming a business owner requires you to be well-versed in many different disciplines. Even something as seemingly straightforward as finding a name for the business actually has a legal process behind it that you must follow in order to achieve legitimacy. Once you’ve decided on a business name, you need to make sure it is available and is not trademarked. Doing this requires you be familiar with a series of terms that have distinct meanings in a legal context. Consult the following breakdown of common name-related terms so you can hit the ground running in this process.
Degrees of Specificity
There are a few business naming terms that are used in different contexts depending on the level of specificity a situation requires and your business’s current stage of evolution.
- Business name: This probably seems like the most intuitive term to use when naming a company because, in a legal context, it is used to refer to any and all names it might have, from the corporate name to the legal name to its products names and more. Consequently, “business name” should be used as a generic term whenever you deal with any kind of legal documentation.
- Corporate name: When your business grows to the point that you decide to incorporate, making it into a legal business structure on its own, you are required to register a corporate name for it. If your business is becoming a limited partnership (LP) or a limited liability company (LLC), you must follow a similar process. Before any of these names are registered, the offices of your state must approve them. If this registered name is then used for company operations, it also becomes the trade name and legal name.
- Fictitious business name: If the business-owning entity’s legal name differs from the business’s trade name, a fictitious business name must be used. For instance, if the name of the business that is shown publicly does not include your name even though you are the sole owner of your business, that name must be registered as “fictitious.”
Public Versus Private
In the case of your business, you may want to give it a name that has nothing to do with your own. If so, there are several more terms that you need to know.
- Legal Name: The official name of the person or entity that owns your business is known as the legal name. In other words, if you are the sole proprietor of your business, then your name is the legal name for the business. If another name for a partnership, LLC or otherwise has been registered with the state, then that becomes the legal name.
- Trade name: The name public consumers use to refer to your business is known as its trade name. This can be the same or different from the owner’s legal name. The trade name is the one seen whenever the business interacts with the public in anything from a spot in the telephone book to business signs and advertisements. If your business is going to make some kind of transaction, such as submitting a loan application or opening an account at a bank, the trade and legal names of the business are required.
- Trademark: Much in the same way a trade name has to do with your business’s interactions with consumers, a trademark is any wording, symbol or design used by your business to market its services or products to consumers. In certain situations, owning a trademark gives you the legal power to keep other entities from using it to market their own goods and services.
Before you start making sales to customers, be sure you have a clear understanding of each of the above terms. You don’t want to be ready to take the next step in your business’s growth only to be held back by some paperwork that wasn’t filed.
Legal Disclaimer
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.