Trade Name Example: What It Is and How It Differs from Other Business Structures

You’ve probably heard of the term “trade name” as a prospective business owner. You might not yet understand what it truly implies or how it is different from other business models, though. We will go into greater detail about trade names in this post, including what they are, how they differ from DBAs and LLCs, how to find them in Maryland, and whether they are preferable to sole proprietorships.

A trade name, which is distinct from the legal name of its owner or company and is also referred to as a fictitious name or assumed name, is the name that a business uses to conduct business. If John Doe, for instance, owns a company called “John’s Plumbing Services,” but wishes to operate it under a different name, he may register a trade name such as “Plumbing Pros.” He will be able to develop a brand identity and marketing plan that are distinct from his name or the official name of his company.

A DBA (Doing Business As) registration, on the other hand, enables a sole proprietorship or partnership to function under a different name. A trade name or fictional name are other terms for it. However, unlike an LLC (Limited Liability Company), it is not a distinct legal entity. On the other hand, an LLC is a type of corporate structure that preserves pass-through taxation while offering personal liability protection for its owners. It is a distinct legal entity that has been registered with the state; it is not a trade name.

The Maryland Department of Assessment and Taxation’s website can be searched if you reside in Maryland and wish to see if a trade name is accessible. This will demonstrate whether the name is available for use or reserved. In Maryland, submitting articles of organization costs $100 if you want to create an LLC. The LLC must additionally pay a $300 yearly charge to keep its status. The fee for registering a trade name is $25.

There is no one-size-fits-all solution when choosing between a sole proprietorship and an LLC. It depends on your financial circumstances, personal liability worries, and business objectives. The simplest and least expensive business form to start up is a sole proprietorship, but it does not provide personal liability protection. An LLC, however, offers personal liability protection but necessitates more paperwork and costs. An LLC is generally a preferable option if you want to hire staff, incur substantial debt, or possess sizable personal assets.

In conclusion, a trade name is a name used by a business to conduct operations and is distinct from its legal name. It is typically subject to a fee and is registered with the state. It’s distinct from a DBA, which is a registration that enables a partnership or sole proprietorship to operate under a different name. On the other hand, an LLC is a distinct legal entity that offers protection from personal liability. You can check to see if a trade name is available and register it for $25 if you intend to use it in Maryland. If you want to create an LLC, the cost to submit the articles of organization is $100, and the ongoing maintenance price is $300. The choice between an LLC and a single proprietorship ultimately comes down to your own requirements and objectives.