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Trade name

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Trade name

A trade name, trading name, or business name is a pseudonym used by companies to perform their business under a name that differs from the registered, legal name of the business. Trade names are typically used by companies to conduct their operations under a simpler brand as opposed to using their formal name within all public communications, or when a desired name was not able to be registered by the business operator, or if that business is owned by a separate company, franchisee, or a sole proprietorship.

The distinction between a registered legal name and a "fictitious" business name or trade name is important, as businesses with the latter give no obvious indication of the true identity of the entity that is legally responsible for their operation. Fictitious business names do not create legal entities in and of themselves; they are merely names assumed by existing persons or entities.[1] Legal agreements such as contracts are normally made under the registered legal name of the business or owner, and the legal name must be used whenever a business sues or is being sued.

In the United Kingdom, Ireland, South Africa, Australia, New Zealand, Hong Kong and Zimbabwe (as well as some parts of the United States), the phrase trading as (abbreviated t/a) is used to designate trade names. In Canada and the United States, the phrase "doing business as" (abbreviated DBA, dba, d.b.a. or d/b/a) is used. In English writing, trade names are generally treated as proper nouns.[2]

Contents

  • Examples 1
  • By country 2
    • Chile 2.1
    • Canada 2.2
    • Japan 2.3
    • United Kingdom 2.4
    • United States 2.5
  • See also 3
  • References 4
  • Further reading 5

Examples

For example, speaking hypothetically, a company named Panda Chemical Manufacturers, Inc. may use the more consumer-friendly trade name Panda Pharmaceuticals when it holds itself out to the public.

Another example may be for a chain or franchise. For example, a McDonald's Restaurant may be owned and operated by a franchisee, not the McDonald's Corporation. In this case the legal name of the restaurant could be Smith Investments Inc, DBA McDonald's.

Many companies use trade names or business names that are "brandable". These types of trade names frequently have no meaning (that is, they are pleasant-sounding made-up words). This makes the branding process easier. First, there are less preexisting connotations attached to the name and second, it is more likely that a trademark application for the name will succeed because it probably has not been used before as a mark for that particular service or product.

By country

Chile

In Chile, a trade name is known as a nombre de fantasía ('fantasy' or 'fiction' name), and the legal name of business is called a razón social (social name).

Canada

In Canada, the term operating as (abbreviated to o/a) is used. In some jurisdictions, such as Ontario, when a businessperson writes a trade name on a contract, invoice, or check, he or she must also add the legal name of the business.[3]

Numbered companies will very often operate as something other than their legal name, which is unrecognizable to the public.

Japan

In Japan, the word yagō (屋号) is used.

United Kingdom

In the United Kingdom, there is no filing requirement for a "trading as" name, however, there are requirements for disclosure of the owner's true name and some restrictions on the use of certain names.[4]

United States

In several U.S. states, DBAs are officially referred to using another term. Oregon uses Assumed Business Names;[5] Washington calls DBAs trade names;[6] other states refer to trade styles or fictitious business names.

For consumer protection purposes, many U.S. jurisdictions require businesses operating with fictitious names to file a DBA statement, though names including the first and last name of the owner may be excepted.[7] This also reduces the possibility of two local businesses operating under the same name. Note, though, that this is not a substitute for filing a trademark application. A DBA filing carries no legal weight in establishing trademark rights.[8] In the U.S., trademark rights are acquired by use in commerce, but there can be substantial benefits to filing a trademark application.[9]

DBA statements are often used in conjunction with a franchise. The franchisee will have a legal name under which it may sue and be sued, but will conduct business under the franchiser's brand name (which the public would recognize). A typical real-world example can be found in a well-known pricing mistake case, Donovan v. RRL Corp., 26 Cal. 4th 261 (2001), where the named defendant, RRL Corporation, was a Lexus car dealership doing business as "Lexus of Westminster", but remaining a separate legal entity from Lexus, a Division of Toyota Motor Sales, U.S.A., Inc.

In California, filing a DBA statement also requires that a notice of the fictitious name be published in local newspapers for some set period of time to inform the public of the owner's intent to operate under an assumed name. The intention of the law is to protect the public from fraud, by compelling the business owner to first file or register his fictitious business name with the county clerk, and then making a further public record of it by publishing it in a newspaper.

See also

References

  1. ^ United States case: Pinkerton's, Inc. v. Superior Court, 49 Cal. App. 4th 1342, 1348 (1996).
  2. ^ Gary Blake and Robert W. Bly, The Elements of Technical Writing, pg. 57. New York: Macmillan Publishers, 1993. ISBN 0020130856
  3. ^ Business Names Act, R.S.O. 1990, c. B.17, s. 2(6)
  4. ^ Companies House Booklet GP1, Chapter 10
  5. ^ Oregon Business Information Center FAQ from the Oregon Secretary of State
  6. ^ Washington State Department of Licensing FAQ: Trade name registration
  7. ^ "Doing Business As: What Is It and Do You Need It?; Freshbooks Blog May 7, 2013". 
  8. ^ "Protecting Your Trademark" (PDF). booklet. US Patent and Trademark Office. Retrieved 1 January 2013. 
  9. ^ Hanson, Mary. "Corporate Names, Trade Names, Trademarks, and Fictitious Names". The Business Advisor. Retrieved 1 January 2013. 

Further reading

  • Klein, Benjamin (2008). "Brand Names". In  
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