Learning about trade names
One of the key elements to doing business is a good sounding, attractive name as this is your business card to (potential) customers. This is your trade name. With your trade name you can prevent others (within a geographically limited area) from using the same or a similar name that might cause confusion with yours.
Discover more about trade names in this guide.
- What is a trade name?
- Why is a trade name important?
- What are the requirements for a valid trade name?
- How do I get protection for my trade name?
- In what territory is my trade name protected?
- How much does it cost to protect my trade name?
- How long does the protection last?
- What’s the difference between a trade name and a company name?
- What’s the difference between a trade name and a trademark?
- So, should I choose a trade name, a trademark or both?
Step 1/10 What is a trade name?
A trade name is the name under which an individual (a sole proprietor) or a company chooses to do business. It can distinguish your company from other companies. In other words, your trade name is the name your customers know you by.
Step 2/10 Why is a trade name important?
A trade name is very useful since it protects your name in the region and sector you operate in. You do not need to register it, so you do not have to pay costs like registration fees, renewal fees, etc. Your trade name helps you stand out from other companies and can be beneficial when building up your reputation and becoming known in a region. Another company cannot use the same name or a similar name that would create confusion within the territory and sector your trade name is known. Last but not least, unlike trademarks your trade name can be descriptive (see the smart guide on trademarks).
Step 3/10 What are the requirements for a valid trade name?
If you are a sole proprietor, you could use your own family name (but are not obliged to do so). Furthermore, a trade name must not be confusing or misleading. And most important your trade name must still be available and can’t cause confusion with the names of other companies. So you’ll have to check the legal names in the Crossroads Bank for Enterprises (BE) or in the Chamber of Commerce (NL). Also check the trade names of other companies that offer the same products/services in the area you want to operate in. As there is no obligation to register trade names, you’ll have to check these trade names online, check domain names, and so on. And last but not least, check the trademarks registers for the products/services you want to use the name for, since a trademark owner can stop you using the same name (see the smart guide on trademarks).
Step 4/10 How do I get protection for my trade name?
A trade name belongs to the individual or company who uses it first, for example using this name as your domain name, mentioning it on your business documents, invoices, on your shop frontage, etc. No formal registration is required. This explains why the same trade names can be used in different regions/cities. In every village, you might find a pub called ‘The Square’. Although it’s not obligatory, registration might still be beneficial, for example to prove when you used the name for the first time. This (optional) registration can be done at different entities. For Belgium you can do this at the Crossroads Bank for Enterprises, and in the Netherlands at the Chamber of Commerce.
Step 5/10 In what territory is my trade name protected?
The protected territory means the area where your name is known to the public. The more your trade name is known, the bigger the scope of protection. This can vary from a small village to a whole region. But note that you do not automatically get nationwide protection of your trade name if you have a website and, in theory, provide your services nationwide. If your customers mainly come from the region where your company is located, your trade name will only be protected in that area.
Step 6/10 How much does it cost to protect my trade name?
Because trade name protection arises automatically after consistent use of the name, there are no costs involved.
Step 7/10 How long does the protection last?
As long as you use your trade name, it is protected. So in theory there is no limit. You’ll lose the protection when you don’t use your trade name anymore.
Step 8/10 What’s the difference between a trade name and a company name?
A company name is an entity’s legal name as stated in the articles of association, for example ‘business BV’. The company name must be registered in the Crossroads Bank for Enterprises (BE) or in the Chamber of Commerce (NL). This official name can differ from the trade name under which the company trades. The first party to register a company name has an exclusive right to that name. You may use your company name as your trade name (and even your trademark), but you may also choose a completely different name as a trade name. If you operate in a variety of sectors, you might even choose different trade names for each of these sectors while still only having one official company name!
Step 9/10 What’s the difference between a trade name and a trademark?
A trade name is a name under which you run a business. It distinguishes your company from other companies operating in the area in which the trade name is known. By contrast, a trademark distinguishes your products/services from those of your competitors and can be amongst others a name, a logo, or a combination of both, under which you sell products and provide services.
A trade name does not grant you a monopoly on that name, only a trademark will give you a monopoly on the use of that trademark in relation to specific products and services.
A trade name only applies in the region and for the sector where the trade name is used and known. This means that trade name protection is determined by how well the trade name is known. By contrast, a trademark gets you protection for the whole territory in which it is registered.
Trademarks thus have a much wider scope of protection. But this doesn’t mean a trade name is worthless, in some cases it can stop a future trademark in a specific region. A trademark always requires registration to be valid, whereas a trade name only requires a continuous use of that name.
There are strict requirements about what signs can be used in a trademark. A trademark cannot be descriptive, for example, whereas this condition does not apply for trade names. A trade name does not provide companies with trademark rights. Note that if your trade name meets formal requirements, it can be registered as a trademark, so your trademark and your trade name can be identical.
For more information about trademarks click here
Step 10/10 So, should I choose a trade name, a trademark or both?
The use of one does not preclude the use of the other. You can use your trade name as a trademark, if it meets the requirements for a valid trademark, and if you register it as a trademark. If you want to choose between one or the other, take into account the territory where you operate and your preferred level of protection. If you only have a business that operates locally with no intention of expanding further and local/regional protection is enough for you, trade name protection can be sufficient.
If you plan to broaden your operations outside of a specific region, it is definitely worth considering the stronger and broader protection of a trademark. For more information about trademarks click here.
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