What’s the difference between a business name a trading name and a legal name?

Do you know the difference between a business name, trading name and a legal name? Find out now:

What’s the difference between a business name a trading name and a legal name?

Wondering what the difference between a business name, a trading name and a legal name is? Well, wonder no more! This guide will lay out the facts for you.

What’s the difference between a business name and a trading name?

There is no difference!

‘Trading name’ is an old term, and now ‘trading name’ and ‘business name’ can be used interchangeably. ‘Business name’ is the newest and most correct term, so it’s the term we’ll use throughout this guide.

Business name refers to the title your business operates under. Your business name helps customers find, identify and connect with your business.

You can have multiple business names linked to your Australian Business Number (ABN).

What’s a legal name?

A legal name is the name of the entity that appears on all official documents or legal papers. It can be different to your business name.

If you’re a sole trader, your legal name will most likely be your own name. Other legal names include the name of a partnership, a proprietary limited company or an incorporated association.

Do I need to register my business name?

If you want your business to trade under a name that is different from your legal name, then you’ll have to register a business name with the Australian Securities and Investments Commission (ASIC).

Here are some examples of when you should register your business name:

  • Tessa Scott owns a cupcake business as a sole trader. Her legal name is Tessa Scott and she wants her business to be known as Tessa Scott’s Cupcakes.

  • Clare Smith and Jamie Johnson run a plumbing business together, operating as a partnership. Their partnership’s legal name is Clare Smith and Jamie Johnson and they want their business to be known as Clare and Jamie’s Plumbing.

  • A proprietary limited company is registered with ASIC under its legal name Alex Smith Pty Ltd. The company wants to operate under the name ‘Ace Consulting’, so it must be registered as a business name.

Here are examples of when you don’t need to register a business name:

  • Charlotte Nand owns an accounting business and operates as a sole trader. Her legal name is Charlotte Nand. Because she is happy to operate her business as a sole trader under her legal name, she doesn’t have to register her business name.

  • Chris Smith and Josh Bright have a building business together, operating as a partnership. Their partnership’s legal name is Chris Smith and Josh Bright. They are happy to operate under their legal name, using all of the partners’ names, so they don’t need to register a business name.

  • A proprietary limited company is registered with ASIC using its legal name John Brown Pty Ltd. As the company will operate under the legal name, it doesn’t have to register a business name. In fact, registering the company with ASIC automatically registers the legal name as a business name.

Can I update my business name once it’s registered?

You can’t update a registered business name, even if you only want to make a slight change to it. If you want to trade under a different business name, you must register a new one. You can either:

  • cancel your existing business name (if you don’t want to use it anymore), or

  • keep your existing business name (in case you want to use it later or for a different part of your business).

Do I have to register my business name in each state and territory?

No. You only have to register your business name once. After that, your name is registered nationally.

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