Business Name and Trade Name: What is the Difference?

Business Name and Trade Name: What is the Difference?

Business Name and Trade Name: What is the Difference?

When you start a business, the first thing which you want to do is choosing a business name. Generally a business can have both registered name or legal name as well as trade name, but these both have a significant difference from each other which exists to protect your business and the customers.

What you call your business can have a direct impact on the company’s success. There are plenty of things which play a vital role in how successful your business is. But having a business name is certainly a key component. 

A business name is the first thing which a potential customer notices about your company, which connects them to your services and products. Hence, having a unique business name or trade name for your company gets you one step closer to being successful. 

When it comes to what you call your company, you would like to understand whether it’s more beneficial to use your business name or trade name. For which, it is important to know the difference between Business name and Trade name. 

Business Name:


A business name refers to your company’s legal name. Legal name is the name which can be used on the paperworks you file to create your business. Generally it is the official name of the person or the entity who owns the company.  An effective name is one which establishes a strong and unique identity and describes the type of business you are conducting. 

The legal name is the formal and official name of the company that identifies it with the government. If you have a corporation, your name probably contains the designation “Inc.” which means incorporated. Whereas if your company is an LLC(limited liability company), then your name concludes with the designation “LLC”.

A company can change their names one or more times as they grow. Changing the name shows that the focus or the agenda of your company is also changing. Name changes may also occur when conflicts arise with other companies as you expand your business into new markets.

Business Name and Trade Name: What is the Difference?

Trade Name:


A trade name is the term used by the companies to perform their business under a name which is different from the official or the legal name of the business. Generally trade names can be used by the companies to conduct their operations under a simpler brand as opposed to using their official name within all the public communications. A trade name does not include the legal phrases like LLC. , Corp. etc.  

A trade name’s main motto is to connect directly with their customers with their name and their product. A company wants their trade name to be considered as their nickname while doing the marketing and considers the business names or for the legal and official purposes.

It is not necessary to have a trade name while doing a business but having one might come in handy.

Pros and cons of having trade name: 

Generally, a company will have both business name and trade name. As mentioned above, a business name is used in legal documents and government forms. Whereas trade names appear in the  marketing, advertisement and signs.


Gives your business more credibility.

Helps you to differentiate between the brands if you have a variety of products.

Allows you to have a direct vision about your business purpose.

Inexpensive to register a trade name.


If you don’t register for a trademark, then there won’t be any exclusive rights to the name which you have chosen. 

Potential extensive application procedures.

For more relevant data, you can contact Digital Ipsum Pvt. Ltd.