Understanding Business Name Terminology

Business name. "Business name" is a catchall term referring to all of a business's names-its legal name, its corporate name, its fictitious business name, and the names of its products and services. It should be recognized as a generic term, since it does not differentiate between the various types of business names.

Corporate name. When a business incorporates, it must register a corporate name. Similarly, a limited liability company (LLC) registers an LLC name and a limited partnership (LP) registers an LP name. These entities' names must be approved by the secretary of state (or other state office that oversees corporations, LLCs, and limited partnerships) before they will be registered. If a corporation, LLC, or limited partnership operates under the registered name, then the corporate, LLC, or LP name is both the legal name and trade name.

Fictitious business name. A fictitious business name is used when the trade name is different from the legal name of the entity (individual, partnership, LLC, or corporation) that owns the business. For example, if Frank Farmer called his sole proprietorship American Appliances, American Appliances would be considered a fictitious name because it does not contain his last name. A fictitious business name is sometimes referred to as a doing business as (d/b/a) name. Most states require that fictitious names be registered.

Legal name. A legal name is the official name of the entity that owns a business. A sole proprietorship's legal name is the owner's full name. If a general partnership has given a name to itself in a written partnership agreement, then the name designated in the agreement is its legal name. Otherwise, a general partnership's legal name is the last names of the owners. For limited partnerships, LLCs, and corporations, the legal name is the name that was registered with the secretary of state.

Trade name. A trade name is the name by which the business is commonly known to the public, which may or may not be the same as the legal name of the owner(s). Frank Farmer's Fridges and Cold Stream Guard Services are examples of trade names. Trade names are used when the business holds itself out to the public, such as on business signs or in the telephone book. For many transactions, such as opening a bank account or applying for a loan, both the business's legal name and its trade name must be given.

Trademark. A trademark (or mark) is any word, phrase, design, or symbol used to market a product or service. A mark used to market a service is called a service mark, though trademark is commonly used to refer to both types of marks. Under certain circumstances, trademark owners have the power under federal and state law to prevent others from using their trademarks to market goods or services.

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