Difference Between a Company Name and a Trading Name?
You may have seen companies using a different name from their official Companies House registration or using the prefix “T/A” (trading as) in front of their name. It can all seem a bit confusing, and as nobody wants to get into trouble with Companies House, we thought we’d do something to demystify the topic.
What is a company name?
This is the name of the business as registered at Companies House, and the name used on any legal documents relating to the business. Whatever other name the business uses, the real name of the company is the one that you find at Companies House.
Company names must be unique and can’t look or sound like another company. For example, a company couldn’t register its name as “Media Marketing Eight” if there was another existing company called “Media Marketing 8”.
Company names must also be careful not to suggest some sort of official recognition or accreditation, such as “The Government news company”.
What are trading names?
A trading name is an entirely different matter to the registered company name. It doesn’t actually need to be registered anywhere, and doesn’t have the same restrictions as with the company name. In fact, a single company can have many trading names, or they can just choose to use their company name as their trading name. For example:
- A company might buy another business and absorb it into its existing operations. The name of the acquired company will have value in terms of customer loyalty and name recognition, so the new owners might decide to continue using it.
- A business may set up different departments, perhaps as a way of producing and delivering a particular service. Each department could use its own trading name so that it is clearly distinguished from other products or services.
But there is no requirement to choose a trading name. If you don’t want to use one, then you can stick with your company name, and all will be well.
The requirement to register a unique name at Companies House does mean that company names are, to some extent, protected against other companies opening up with the same or a similar name. That doesn’t protect against a sole trader or partnership starting up with a similar name though.
To protect consumers from dealing with businesses that are passing themselves off as another company, registering a Trademark can stop people piggybacking in this way.
A trademark can be a name, a logo, or even a colour or series of colours; anything that can distinguish your goods or services from a competitor.
Which name should I use where in my business?
If you have a trading name and a company name, what do you need to use where?
You can use your trading name on any documents you like, but in some cases, you must also make it clear which company is the owner or operator of that style of trading.
To illustrate this, you may have a bank account that has the name “ABC Company Ltd, T/A Media Marketing Eight”. This is more important nowadays as direct payments must be made to a specifically named account.
You must show your official company name in:
- Company websites
- Invoices, credit notes and demands for payment
- Business letters
- Contracts and legal documents
- Company notices such as general meeting notifications
- Bills of exchange, promissory notes, endorsements, and order forms
- Cheques signed by or on behalf of the company
- Letters of credit
- Applications for licenses to carry on a trade or activity
- Registrations with government departments such as HMRC
Trading name or Company name?
In some cases, you may want to use a trading name. This will be helpful when you have an official company name that doesn’t accurately reflect your brand or when you can’t register your desired trading name. It’s simple to do and requires little in the way of legal work.
Contrast this with changing your company name registered at Companies House where you will need to go through an official procedure, and then change all of your contracts into the new official name.
Even if you take every precaution to choose an appropriate name from the start, things might change as your business evolves, so using a trading name can help.
If you have a lot of distinct brands that you wish to distinguish from one another then trading names may help here too.