When you start a new business, the last thing you want to do is get tangled up in an area of the law that doesn’t apply to your exact situation. That’s why it’s important to understand what exactly a trading name is and how it differs from a business name. When you understand these terms as they apply to your business and can see how they differ from each other, then you will be able to choose one over another.
What is a trading name?
A trading name is a name that you use to trade in a particular business. A trading name is not a legal entity, and it isn't registered with the Australian Securities and Investments Commission (ASIC). Businesses could use these before the introduction of the National Business Names Register on 28 May 2012.
The Australian Business Register and ABN Lookup still display unregistered trading names; however, they will be removed from November 2023 and only registered business names will be displayed.
A transition period from 28 May 2012 to 31 October 2023 is in place to allow businesses affected by the removal of trading names sufficient time to inform their customers, suppliers, and other stakeholders of any changes to the name that they use to conduct their business.
The transition period is also designed to allow businesses with unregistered trading names time to register a new business name and obtain an Australian Business Number (ABN). If you are unsure if your business has an ABN or if it has been registered under the National Business Names Register, then please contact our team at Registry Australia.
What is a business name?
A business name is the trade name that you use to do business, and it can be the same as your legal entity's name or a different one.
If you operate under your own name, there’s no need to register it as a separate entity. However, if you wish to use a name that’s different from your legal entity’s name, then registering it is essential. You can check the availability of your desired business name using our online Business Name Checker tool. We recommend using this service before purchasing any domain names or trademarks in case someone else already owns them.
You need an existing ABN before registering a business name – so if yours hasn't been issued yet, we recommend getting one first by visiting Registry Australia.
When would I use a trading name vs. a business name?
If you’re just starting out in business, it can be difficult to know what to call your company. A trading name and a business name are two different types of things that can be used as the name of your business. It’s important to understand this distinction so that you can choose the right one for yourself and protect the legal rights that come with it.
A trading name is used by single traders and partnerships without any legal registration. This means that it does not need any official approval from ASIC. If someone wants to register a business with the same name as yours, it will be rejected because they do not have permission from ASIC.
If you want to register your business with ASIC and use a trading name, then you will need to get approval from them first. This is because they want to make sure that the name isn’t misleading or deceptive in any way. If it is, they can reject it and force you to choose another one.
Why do I need to register my business?
It is not uncommon for businesses to be named after their founders or owners. Should you choose to do this, it is important to understand that a business name is not the same as a personal name and therefore does not require registration.
If you are planning on using a brand name for your company instead of a personal name, there are several reasons why registering this brand should be part of your business plan:
- Protection from infringement – There are many ways in which someone could potentially infringe upon your brand without realising it. For instance, they may use an identical or similar logo or slogan; they may even try using similar fonts and designs on their products as well.
- Increases consumer trust – With so many fake products being sold online today (and even offline), consumers have lost faith when trusting new brands coming onto marketplaces like Amazon Marketplace where sellers tend toward selling low quality replicas instead of real goods. Registering brands early helps build trust between customers/potential clients who want only authentic items sold through reputable channels only.
- Protection from imitation – By registering a trademark before it enters the marketplace, sellers can protect their brands from being copied by other people who may want to exploit their hard work without compensation for whatever reason; whether it be for personal gain or simply because they don’t like them. Registering early also allows sellers to take legal action against infringers, if necessary, which can lead to recovery of damages suffered by the seller as well as attorney fees and court costs paid by the defendant (this is what happens when someone tries to steal your business).
How can I protect my business name?
If you're planning on running a business, it's important that you register your ABN (Australian Business Number), business name, domain name and trademarks all in one place with Registry Australia. It's quick and easy to do this with our high-level support team on hand for guidance.
We recommend registering your domain name related to your business name even if you don't plan on using it yet. This means that no one else can imitate your business online without infringing on the intellectual property rights associated with the registered trademark.
With Registry Australia's domain registration tool, it's easy for you to check for the availability of your desired domain name and register it in the same place. Contact us today for more information about how we can protect your brand. We are committed to providing high quality service and support to all our registrants.
Make sure to register your business name before the October 2023 deadline so no one can beat you to it.
We hope we answered your question on the difference between trading names and business names. This is a common issue for many new entrepreneurs, and it’s important to know your options before registering with any government agency or other organization.