What is a Trade Name?

A trade name is an official name under the company to promote its brand, services, or product and is different from the registered company’s name. An owner of the company has numerous choices for a trading name. For example, they can use the founder’s name, describe what they do, use a word from a context, or make a new word. It is commonly known as ‘Doing Business As’ (DBA) in the United States.

Example of Trade Name

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A trade name is an official name under which the company’s products are recognized. DBA (Doing Business As) name is usually different from the registered company’s name. It provides branding for a company. For example, there are many highly recognized companies having the other DBA name from the company’s name such as Google, IBM, Walmart, Visa, eBay, FedEx, 3M, Coca-Cola, Nike, UPS, GAP, Apple, McDonald’s, Microsoft, Starbucks, and so on.

Who Can Register a Trade Name?

An individual doing business of any type, such as sole proprietorship (a business which a single person runs) or a company, can register a trading name. Still, it must have some meaning and potential to represent the business. Doing Business As (DBA) names can be registered with a state or a local government or both, according to the jurisdiction of the United States.

How is Trade Name Different Than a Trademark?

A trade name and trademark may sound similar but have different meanings and uses that must be known by a person carrying out a business or the individual willing to start a business.

  • Trade Name: It is an official name under which its business is carried on. It is also known as DBA in the United States, and registering the DBA is important to some companies but not for all. But it won’t protect the brand name, and it also doesn’t give an absolute right to use the brand name.Trademark: Trademark protects the brand name of the company. It also helps protect the company’s symbols and logos because the brand name is one of the most important assets in the business, so it is worth being protected.

Benefits

  • Provides Privacy: It provides privacy for the owner, especially for the sole proprietor. They may have to use the name for the company, but having a trading name helps them keep privacy and do business with an official name.Flexibility: It provides flexibility in the business as there can be many trade names for a business which helps in the division of different products or types of business in a company.Enhanced Value: It helps strengthen the value of the products, and it can also protect the company’s name from bad advertisements.

Limitations

  • No Right to the Name: It does not protect the brand name unless they registered for trademark. So, the company owner does not have an absolute right over the name.Renewing of Registration: Some businesses have to register their trade name either with a state or local government or both. Some states also require these trademarks to be registered every few years to maintain their name, including extra cost and effort.

This article is a guide to Trade Name meaning. Here, we discuss trade name examples, registrations, benefits, limitations, and who can register it. You may learn more about our articles below on accounting: –

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