What is a trade name?
A trade name is what a business uses to operate and interact with customers. In other words, a trade name is what a business presents to the public.
Trade names are similar to people’s preferred names. For various reasons, some people go by a preferred name that differs from their legal name. It’s no different with businesses.
Trade names are not mandatory, and some companies may even find them unnecessary. In that case, a business can choose to use its legal name as its trade name. However, many businesses of all types use trade names that differ from their legal names.
A trade name is sometimes referred to as a:
- Fictitious name
- Operating-as name
- Alternate name
- DBA name
What does DBA mean?
DBA stands for “doing business as.” A DBA name is another way of referring to a company’s trade name.
Why do businesses use trade names?
Often, businesses use trade names for advertising and sales purposes. Unlike some legal names, trade names don’t need to include specific words or abbreviations relating to business structure, such as Corp or LLC. Therefore, trade names are usually less wordy, making them ideal in marketing.
For example, a company with the legal name “Smith’s Moving Services Limited Liability Company” may want to use “Smith’s Moving Services” in an advertisement or on signage because it’s succinct and catchy.
Also, companies use trade names to differentiate their brands. Consider Gap, Banana Republic, and Old Navy retail stores. These brands are all trade names under the Gap Inc. corporation. Using trade names allows Gap Inc. to function using multiple brand names while operating as one corporation.
Registering a trade name
Once a business has decided that it will operate under a trade name, it should register the name with the appropriate state, county, or city office.
Requirements for registering a trade name vary by state and office. Also, requirements can vary by business structure.
Business owners must conduct their own research to find out if they should register their trade name
. One of the best ways for a business owner to find out is to visit their County Recorder’s office and ask. For more information about choosing and registering a business name, visit the U.S. Small Business Administration
Please note that registering a trade name doesn’t usually provide legal protection. In some states, multiple businesses can operate under the same trade name even if one business has it registered.
Trademarks, on the other hand, can give businesses the exclusive right to their trade names.
Trade names versus trademarks
Although they sound similar, trade names and trademarks are not the same
. A trade name is a company's publicly used name, while a trademark legally protects an aspect of the company's brand.
A trademark is a type of intellectual property
protection. Trademarks can protect various things used to distinguish a product or service, including words, designs, and colors.
When registered properly, a trademark-protected word or name can be used exclusively by its owner. Trademark-protected words and names are easy to spot because they’re labeled with the trademark symbol (™) or registered trademark symbol (®).
Registering a trademark is a separate process from registering a trade name. Trademark registration is done at the federal level, not the state level.
Can you trademark a trade name?
A trade name is sometimes, but not always, entitled to protection under trademark laws. To be eligible for trademark protection, a trade name must identify and distinguish a business’s product or service. Also, it can’t be too similar to any other registered trademark.
For example, Apple Inc. operates under its trade name, Apple. The trade name, Apple, is eligible to be trademarked because it’s distinctive. If a business’s trade name is too vague, such as The Computer Store, it’s probably not eligible for trademark protection.