This article will discuss the fundamental difference between a legal name and a trading name for your business. It also highlights legal and trade names' advantages and disadvantages.
Choosing a business address is one of the most important things you can do as a businessman. Your company might operate under either your formal title or brand name.
Furthermore, each GST refund form has a separate field for the trade name and the legal name that must be filled out. So, in this article, we’ve outlined all the distinctions between registered and brand names.
What Is A Legal Name?
A legal name is the user’s or institution’s formally registered identity. For example, a company’s legal name is usually utilised on business papers, tax documents, and other official documents.
What Is A Trading Name?
A trade name is a term under which a person or Organisation chooses to conduct business. A trademark is also called a DBA (doing company as), T/A (trade as), or O/A (operated as) identity. You Can make the Company Name Search Process Online Easily With our Experts.
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Distinction Between a Legal Name and a Trading Name
One of the most crucial elements in a company’s growth is the legal name and trade name. But, without a doubt, numerous factors affect your company’s success.
One of the foremost things prospective customers notice regarding your company is the title. It allows users to connect with business customers and engage with the items and services you offer. With a catchy legal trademark and trade name, your company is closer to success.
Regarding your company’s name, if your real surname or a brand name is more important.
You could use brand names whenever you wouldn’t want to use your real surname (which usually ends in LLP, Co. Ltd., or something similar). Another significant distinction is that legal names are used in administration, whereas trade names are used in marketing and signboards.
Example for The Distinction Between a Registered Name And a Brand Name:-
Everybody knows the term ‘urban firm’, a registered trademark. Nevertheless, this corporate business name is UrbanClap Solutions Pvt. Limited
What Is The Difference Between A Formal Title And A Brand Name?
Various methods exist to verify an entity’s brand name and official title.
- Using an establishment registration certificate by the firm’s Registration, anybody can check an institution’s legal identity and marketing association. A partner certificate was issued by the Register of Companies in the instance of a general partnership.
- The taxpayers can use GST REG-06 to verify an institution’s brand name and official title under GST.
The Benefits Of Using A Separate Trade And Legal Name
- Increases the credibility of the company
- 2. Attracts new customers
- Make the products stand out.
- Clarity of the business’s mission
Consequences Of Using A Separate Legal Name And A Separate Trade Name
As a result, there are no significant disadvantages to choosing a separate trade name and legal name, but we’ve narrowed it down to three:
- Selecting a catchy business name
- Getting the name registered (obtaining Trademark)
Trade Names Have Limitations
The most significant disadvantage of brand names is that, throughout most jurisdictions, establishing one does not grant you unlimited rights to use it. For example, if your company’s legal title is Sandy’s Frozen Yogurt LLC, but your Trademark is Yummy Dessert, any other company might use it. The Process of making Name Change Online is also Crucial if you want to grow the brand.
In some jurisdictions, the first company to file for a Database is granted the power to use it. You could have been using the name Yummy Dairy Product for a while. Still, if Tia’s Frozen Yogurt LLC has indeed trademarked it, you probably wouldn’t be able to do it if your jurisdiction follows this law.
The only way to know that you have unique ownership of a brand name is to establish it as a mark with your state’s company registrar’s office, which is a much more complex and expensive procedure.
Your legislation requires you to update your Trademark file every several years or establish it in each area you intend to conduct business. In addition, it entails filling out paperwork and paying fees in each municipality, which can quickly add up.
What Is The Purpose Of A Company’s Trade Name?
In most cases, a business will have registered and brand names. However, their real surname is the title that shows on laws and government papers, such as their Certificate of Association, which are files that a firm must file with the government office to become a company officially.
Businesses will most likely utilise their trade names in sales and advertising. Therefore, consider them to be a sort of corporation moniker. For example, Disney Consumer Goods and Interactive Entertainment is known as The Toy Shop, a less flattering moniker (and less of a mouthful).
Businesses also use company names to distinguish their brands, mainly if they produce a wide range of items for particular populations. For example, New Navy, Old Republic, Adidas, and Combine are all different stores having distinct merchandise, but they are all Apple Inc. brands.
Is It Necessary To Establish A Brand Name?
Some jurisdictions (such as Kerala) require enterprises to legally establish a law and a trading name to engage in commerce under both, but this isn’t the case elsewhere. As a result, the option to register both is frequently left to the discretion of the company owner; nevertheless, there are several benefits to registering a trading name.
If your customers pay you with cheques, having two identities registered allows you to create a company checking or savings account in either identity. In addition, your customers can use your real surname or Business name as the beneficiary. It is incredibly beneficial if your customers are unfamiliar with your formal title.
It’s worth noting that licensing your brand in some places doesn’t necessarily prevent other businesses from doing trade under that brand. The title to the registered Trademark: https://ipindia.gov.in/ usually goes to the person who uses it first in connection with their firm, not necessarily the first to register it.
Selecting The Right Name
The crucial thing is that you are using both to your advantage, irrespective of how much your official business name differs from your Trademark or brand name. At the absolute least, attempt to make your Trademark memorable, snappy, and easy to say, and consider how a potential consumer will perceive your name.
Conclusion:-
We can deduce from the preceding paragraphs that a commercial name and a legal name are two distinct entities that should not be used together. Furthermore, a trading name aids in client attraction and brand recognition. As a result, understanding the distinction between registered and brand names is critical. You can reach out to the Vakilsearch for any queries.
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