Why do I have to register a business name?
Only recognised ‘Legal Entities’ are able to own property, enter into contracts, borrow money, sue or be sued. The most common types of legal entities are people and companies.
However many Legal Entities choose to not operate their businesses under their own names but rather another name which is perhaps easier to remember or include in marketing material. This has the potential to cause confusion among the general population as to who exactly they are doing business with.
If then, a Legal Entity chooses to trade using a name other than their own full name, they must register that name as a Registered Business Name. This will enable anyone dealing with that business to conduct a search to establish the name and details of the Legal Entity which owns that name. If there is ever a dispute between the customer and the business, that dispute will actually be between the customer and the Legal Entity that owns the business name.
The National Business Names Register (introduced in 2012)
To confuse things even further,
- A ‘trading name’ refers to an unregistered name that businesses could use before the introduction of the National Business Names Register on 28 May 2012.
- A trading name is not a registered business name and is not a Legal Entity.
- To continue using a trading name, the business must now register the name.
Businesses are now required to register a business name when they want to trade under a name other than their own legal entity name.
Trading names were to be retired from 1 November 2018, however the transitional arrangements have been extended to 31 October 2023. To continue using a trading name after October 2023, the trading name must be registered.
There are specific rules and requirements as to whether a business will need to register the trading name. For example, sole trader Erin Scott trades under her own legal name and does not need to register the business name. However if Erin adds in a descriptor such as ‘Erin Scott’s Fencing’, or Lovely Locks by Erin’ then such names would need to be registered.
A key point is that registering your business name does not give you exclusive trading or branding rights over that name (though it helps) and another business may operate with a similar name.
If you want exclusive trading and branding rights, then you may wish to consider a trade mark which is a combination of words and design which can be registered on a National Register.
Should you need specific advice about your business name or your business in general, please feel free to contact Kirsten Woolston to discuss your options.