Trading Name vs Business Name: What’s The Difference?

The terms ‘trading name’ and ‘business name’ get used interchangeably at times, however they are very different from one another. 

It’s important to understand the difference so you can be aware of the legal implications that surround them and act accordingly. 

After all, you want to protect your business as best as possible!   

So, What Is The Difference Between the Two? 

A business name (or even your company name) is the legally registered name you have for your business. 

A trading name, on the other hand, is the name your business might go by publicly. The two names don’t need to be the same.  

For example, a business name that goes by ‘Stanley’s Burgers’ might be adopted as 

‘Stan’s’. Therefore, while ‘Stanley’s Burgers’ might be the legally registered business name, ‘Stan’s’ is what others might refer to it as when saying, “let’s go to Stan’s for a bite’. 

Even though your trading name might end up being the name your business is recognised by, it’s still important to register your business and your business name. 

Why Do I Need to Register My Business Name?

It’s important that no one else takes your business name. The primary reason to register your business name is to be identified, to market and promote your business and attract customers. 

You do need an New Zealand Business Number (NZBN) to register a business name. Having an NZBN also has a number of other benefits:

• Taxes – Applying for the relevant taxes can also be done when registering for an NZBN 
• Invoices – When issuing invoices, it’s much better to have your business’ NZBN on there
• Domain name – Once you have your name registered, you can select a domain name that matches
• Identification – a NZBN is a great way to identify your business, with its own unique number.
• Records – It’s much easier to legally keep track of your business and its legitimacy once you’ve registered it Inexpensive – It’s relatively cost effective and efficient to apply online 

If you’re operating as a company, then you will automatically be granted an NZBN. 

However, other business structures such as a sole trader or partner will need to apply for one.

As we mentioned, there are a few key benefits to doing this and the process can be completed online.  

Do I Have To Register A Business Name If I’m A Sole Trader?

There are circumstances under which you don’t need to register your business name, such as when you operate your business under your own name. 

If Sally Smith is the name of Sally Smith’s business venture, then she doesn’t need to register it as a business name.

Even if it’s a partnership, if the name under which the business operates is the name of the partners, then it doesn’t have to be registered.

However, if you are a sole trader or partner that is not using their personal name then you will need to register a business name. 

How Can I Register My Business Name?

Before you go ahead with your application, it’s good to see what names are available first. You can use ONECheck to see the business names that have already been registered. 

Once you’ve decided on a name, it’s an easy process to register it and there’s plenty of help available to register you NZBN. Here’s a helpful resource on picking out and protecting your business name. 

How Can I Protect My Business Name?

Although it’s true that nobody else can register your exact same name, that doesn’t mean your name is protected. A slight difference can allow a name very similar to yours to be registered by another party. 

Also, somebody might have already registered the trademark to your business name, which could result in a trademark infringement and be very costly. You can search for what trademarks have already been registered here. 

You should also probably check if someone has taken the domain name already. You can do this through any of the many domain hosting sites, like Wix or Godaddy. It wouldn’t be ideal to register a business name only to find the domain name has already been taken.

You might even consider protecting your business name further by applying for a trademark yourself – you can check all this with the Intellectual Property Office of New Zealand (IPONZ). 

What’s Next?

There’s a vast difference between a trading name and a business name, though it’s perfectly alright for your business to have both! Just be sure to have all the correct registrations and protections in order to enjoy security when it comes to your business names.  

If you would like a consultation on your options moving forward, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.

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