The Basics of Trade Names
A trade name is the name under which a business operates. It’s also called a "doing business as" or DBA name. A trade name differs from a company’s legal name and identifying it can help customers recognize and interact with a business. However, registering a trade name provides some benefits but not full legal protection.
Requirements for registration vary by jurisdiction; yet most areas demand filing some DBA form, unless the business operates under the full legal names of the owners. In Washington D.C., for example, trade names file with the DCRA and typically exclude the owner’s real names. States mainly register trade names for tax and tracking purposes, not for full legal protection. This means registering provides no exclusive name use rights, so it’s essential to understand the limitations of trade names.
Trade Names vs. Trademarks
A trade name is a company’s chosen business name used during operations and for customer interactions, while a trademark legally protects a specific brand’s identity. Misunderstanding the difference could cause problems, as trade names do not protect brands legally. Trademarks, like the Nike Swoosh, provide more complete brand protection.
The registration process also differs for trade names and trademarks. Trade names register under state provisions, whereas trademarks are processed under the Trademark Act. Approval criteria vary between the two; for example, trademarks allow for similar trade names but have stricter guidelines for brand uniqueness and legal protection.
International Expansion and Brand Protection
When considering international expansion, registering a trademark is beneficial as trade names cannot extend as a European Union or international brand. Trademarks enable easier international reach. Trade names are primarily for notice, lacking the power to prevent others from using similar names. Registering a trademark solidifies legal rights over a brand name.
Selecting a Trade Name for Your Business
Choosing the right trade name is crucial for your business’s success, as it can make your business more memorable and helps establish your brand. When selecting a trade name, ensure it aligns with the rules and procedures of your local jurisdiction, and consider the benefits of customer recognition it offers. It’s also important to understand that a trade name does not need to include additional words or legal phrases, and can be as straightforward as "Mike’s" notwithstanding the legal business name being "Mike’s Corporation."
How to Register a Trade Name
To create a trade name for your business, follow these steps:
- Decide on a suitable trade name that enhances brand memorability.
- Check with your local jurisdiction to understand the specific requirements.
- File the necessary DBA form unless you’re using your full legal name as the business name.
- Register the trade name with local or state authorities as appropriate.
Remember, registering a trade name allows you to accept payments with either your legal business name or your trade name, simplifying transactions for clients and vendors.
In conclusion, while a trade name helps establish and promote your business, it does not afford the legal protections or brand security provided by a trademark. Consider both when planning the identity and reach of your business.