In this informative article, we have penned the importance of trade and the legal name of a business in general, as well as in the context of GST. Continue reading to learn more.
What you generally call your enterprise may break or make its success. Sure, there exist several factors that influence your company’s performance.
However, the legal name of business is unquestionably important. One of the very first things potential clients notice about your enterprise is the name. It brings your clients closer to your services and products. Your enterprise is one step closer to prosperity if it has a solid legal name.
Understanding the Legal Name of Business
The Legal Name of a Business is basically the name you use on every Legal document to establish your company. If it’s personal business, it’s the name on the company documents that you register, which is contained in the memorandum of association.
If your company is a general partnership with a formal partnership agreement that provides the partnership with a name, that particular name is basically your company’s legal name. Or else, the general partnership’s legal name is made up of the proprietor’s last name. All government applications and papers require your company’s legal name, especially when applying for a central employer UID (unique identification number).
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Understanding the Legal Name of Business in the Context of GST
The legal, genuine name of your business that may be recognized by the Government is the legal name of the business under GST for ownership (as indicated in PAN). Simply put, It is the name documented when a business or company is formed. In most cases, the business’s legal name is the same as the firm name on the PAN. Simply by submitting the documents, you legally assign the legal name of the business in GST that’s generally used in your tax returns and appears on the employee ID or tax ID.
Legal Business Name: Registration Requirements under GST
If you are starting an LLP or a private company, you must register the legal business name of your corporation. The name registration is just one of the legal procedures for your organization. Whichever name you make use of in your filings is your official business name under GST. In such situations, no additional registration is necessary.
Before filing your incorporation documents, you should conduct a name search along with the state to see whether the name you want to use is available. You may be permitted to maintain a name (for a charge) until the paperwork is submitted, but this is not the name’s official registration. It is not necessary to have a trading name since you can operate your firm using the GST legal name alone. However, if you choose to make use of a trading name in GST, you must register the name and conform with trademark legislation. You Can Follow the Complete Company Registration Process with the Help of Your Experts.
Listed below are two of the most prevalent mismatch scenarios:
- The missing trade name is in the registration certificate.
- The distinction between legal names under various laws or legislations.
Nevertheless, it can be fixed by changing the trade or legal name in the Incorporation Certificate. For example: If an enterprise’s name is Jay ABC Pvt. Ltd. On the certificate of incorporation but Jay ABC Pvt. Ltd. on the GST registration certificate, the enterprise name is incorrect. As a result, in this scenario, the name on the registration certificate of GST must be amended to match the name on the Incorporation certificate.
How Is a Legal Name Different from a Trade Name?
One of the essential factors in a company’s success is its legal name as well as its trade name. Without question, several factors influence how prosperous your firm is.
One of the first things potential customers notice about your company is its name. It aids in associating with your customers and interacting with the services or products you supply. Your business is a foot closer to success with an appealing trade or legal name.
When deciding what to call your company, consider if it is more advantageous to use your trade name or legal name. When you don’t wish to utilise your legal name since it usually ends with Pvt., LLP, Ltd., etc., you may make use of your company trade name. Another significant distinction is that legal names are typically used in government; on the other hand, trade names are utilised in ads and signboards. Find our proper process to Apply for Company Name is also very Essential.
Let us illustrate the distinction between trade and legal names with an example: Everyone is familiar with the trade name ‘Urban Company’. Nevertheless, this company’s legal name is actually ‘UrbanClap Technologies Pvt. Ltd’.
Important Reminders:
- Form GST REG-06 supplied by the authorities must be reviewed to validate the taxpayer’s trade and legal name under GST.
- A business or enterprise registered under the 2013 Companies Act can have its legal and trade name confirmed using an Incorporation Certificate provided by the Registrar of Companies.
- If the enterprise is a partnership, the trade and legal name may be validated by leveraging the certificate provided by the Registrar of Companies.
Checking Legal and Trade Name: How to Do It?
There exist many methods for verifying an entity’s legal and trade name:
- Anyone can use an Incorporation Certificate furnished by the company’s registrar to examine an organisation’s trade and legal name. In the instance of a partnership enterprise, the Registrar of Companies will issue a certificate of partnership
- A taxpayer can use GST REG-06 to examine the legal and trade name of a business under GST.
Advantages of Using Legal and Trade Name
A business will often have a trade and legal name. As previously stated, the legal one appears on government forms and legal papers. A trade name, on the other hand, is commonly seen in ads and signage. It is up to the company to decide whether or not to use a trading name instead of their legal name. Utilising a trade and legal name has a set of advantages:
- Improved business credibility
- Lures more consumers
- Distinguish the items
- Clarity of purpose in business
How to Select a Trade Name and Legal Name for Your Business?
Labelling your business isn’t as simple as it seems. Your company’s name tells customers a lot about it. As a result, you’ll need a name that is distinct, eye-catching, and memorable. To select the ideal name for your business, perform the following:
- Consider ways to incorporate your company’s message into that moniker.
- Select something simple to remember and say.
- Avoid using difficult-to-spell terms or lengthy words in your business name.
- Ensure that the name has not already been used (online search, domain name verification, trademark search, etc.)
- Request comments on the names of friends, teams, and family members.
Picking a name for your business is a huge step. It takes patience, trial and error, and time to find the perfect name. Make a list of company names you love and check to see their availability. If the name has already been taken, return to the drawing board. Decide on a business name: https://www.mca.gov.in/content/mca/global/en/home.html, check its availability, and then register it in your state.
Conclusion
We may deduce from the preceding lines that the legal and trade names are distinct concepts that shouldn’t be interchangeably used. Furthermore, product names serve to lure buyers and raise brand recognition. As a result, it’s critical to understand the distinction between trade and legal names. If you have any queries reach out to Vakilsearch!
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