By now, you probably realize that entrepreneurship involves a crash course in many interrelated disciplines, from sales and marketing to management and business law. Even the process of settling on a business name, checking for availability, and making sure the name isn't trademarked involves the use of terms with specific legal meanings.
Learning the meaning of these various terms will help you better understand the process. The following list of business name terminology will help you get up to speed.
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. When used in this context, "business name" should be recognized as a generic term, since it does not differentiate between more specific 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 whatever other state office oversees corporations, LLCs, and limited partnerships) before the name will be registered. If a corporation, LLC, or limited partnership operates under the registered name, then the corporate, LLC, or limited partnership 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 the owner's last name. A fictitious business name is sometimes referred to as a d/b/a (doing business as) name. Fictitious business names must 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 that name is the general partnership's 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 seen wherever the business puts 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.
Need Legal Help Securing a Business Name or Trademark?
As an entrepreneur, you will encounter plenty of legal processes while getting your company up and running. Some of them can be handled easily enough by a non-attorney, but there are sometimes instances where you really need the peace of mind provided by a legal professional. If you need help understanding the trademark process or have any other legal questions as you start your business, be sure to contact a business and commercial attorney licensed in your state.
See FindLaw's Choosing Your Business Name section to learn more.
