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What is a Trade Name?

A trade name is an official name under by 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 trade name. They can use the founder’s name, describe what they do, use a word from a context, or even can make a new word. It is commonly known as ‘doing business as’ (DBA) in the United States.

Example of Trade Name

Trade Name

A trade name is an official name under which the products of the company 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 a different 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 is run by a single person) or a company can register a trade name. Still, it must have some meaning and potential to represent the business. Doing Business As (DBA) name 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 meaning and uses which must be known by a person carrying out a business or for the individual willing to start a business.

  • Trade Name: It is an official name under which a business of the company is carried on. It is also known as DBA in the United States, and registering the DBA is important for some businesses but not for all. But it won’t protect the brand name, and it also doesn’t give an unlimited right for the use of the brand name.
  • Trademark: Trademark protects the brand name of the company, it also helps in protecting symbols, logos of the company because the brand name is one of the utmost 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 as they may have to use the name for the company but having a trading name helps them in keeping privacy and doing 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 in strengthening 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 owner of the company does not have a complete 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 in every few years to maintain their name, which involves extra cost and efforts.

Recommended Articles

This has been a guide to what is a Trade Name and its meaning. Here we discuss its examples, registrations, benefits and limitations. You may learn more about our articles below on accounting –

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