Business Organization and Transactions FAQs
How will your business be known?
When a business is formed, the owner usually comes up with a name for the business as a basic element of marketing strategy. Legally, however, the business may be known by another name — the owner’s name if it is a sole proprietorship, for example. The business may have still another name if it incorporates or registers as a limited liability company. Clearly, a business and its products and services may be known by many names. Because of the legal implications, it is important to be consistent and clear when acting in the name of a business or for a personal matter.
What is a business name?
The business name is a 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 is a general term for the business.
What is the legal name of a business?
A legal name is the name of the entity that owns a business as it will appear on documents registered with the state in which it operates. For example, a sole proprietorship’s legal name is the owner’s full name. The legal name of a general partnership may appear in the written partnership agreement, but if not named in the partnership agreement, then the partnership’s legal name is a combination of the last names of the owners. Limited partnerships, limited liability companies and corporations register their legal names with the secretary of state or other state agency.
What is the corporate name of a business?
A business run as a partnership or sole proprietorship may reorganize, for instance, through incorporation. When a business incorporates, it must obtain approval and register a corporate name, and other companies that are required to register with a state agency, such as limited liability companies and limited partnerships, must also register their names with the state agency.
What is a trade name?
A trade name is the name by which the business is commonly known to the public, such as Frank Farmer’s American Appliances, which may or may not be the same as the legal name of the owner. Trade names, which are frequently fictitious business names, are used when the business holds itself out to the public, such as in business advertisements.
What is a trademark?
A business’s products or services may be known by even another name. A trademark or service mark is any word, phrase, design or symbol used to market a product or service. 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.
What is a fictitious business name?
Suppose that the business’s legal name is different than the trade name, that is, the name under which it operates and is known by customers. In that case, a fictitious business name is being used. For example, if Frank Farmer called his sole proprietorship American Appliances, then American Appliances would be considered a fictitious business name. Because Frank Farmer runs a sole proprietorship, the business’s legal name is his full name, Frank Farmer. A fictitious business name like American Appliances is sometimes referred to as a doing business as (d/b/a) name. Most states require registration of fictitious business names.
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Business Organization and Transaction Information and FAQ