When starting a business, choosing the right name is a critical step. However, it’s important to understand the difference between two essential business names: the corporate name and the trade name. A trade name is also known as a “doing business as” or DBA name. While these terms may sound similar, they represent distinct legal concepts with different implications under both state and trademark law.

At Twisdale Law, PC, we assist business owners across North Carolina, South Carolina, and Tennessee in navigating the complexities of business law, including the intricacies of corporate and trade names. We advise business owners in North Carolina, South Carolina, and Tennessee on choosing and registering corporate and trade names. Here’s what you need to know about the difference between these names and how they relate to trademark law.

Your corporate name is the official name under which your business is incorporated with the state. This is the name you’ll use in legal documents, contracts, and formal proceedings. When you register your corporation with the state, the state checks if another company is already using the same name within its jurisdiction. If the name is available, your incorporation paperwork is accepted.

However, registering a corporate name with the state only gives you legal recognition within that state. It does not provide exclusive rights to use that name in commerce, nor does it prevent someone else from using a similar name in other states. The key point here is that state incorporation procedures do not offer the same protections as trademark law does.

The trade name, or DBA name, is the name your business uses in commerce. It is how customers and clients recognize your brand. For example, if your corporate name is “XYZ Enterprises, Inc.” but you operate under the name “XYZ Consulting,” then “XYZ Consulting” is your trade name.

Unlike the corporate name, which is registered with the state, the trade name is primarily governed by trademark law. Trademark law protects the use of names, logos, and other identifiers that distinguish your goods or services in the marketplace. Even if your state accepts your corporate name, you may still face trade name restrictions. Another business may hold the trademark for that name.

1. State Registration vs. Trademark Protection

• • A corporate name is only protected by the state in which your business is incorporated. The state ensures no other corporation can use the same name within its jurisdiction.
  • A trade name is protected under federal trademark law. It can give you exclusive nationwide rights if the trademark is registered.

2. Jurisdiction
   • Your corporate name is only protected in the state where you are incorporated. Therefore, you could have two businesses with the same corporate name, one in South Carolina and one in Tennessee, without infringing on one another’s rights.
   • Your trade name, however, is protected either in your geographic region or across the entire U.S. once it is registered as a trademark. This means that if someone else already owns the trademark for the name you wish to use, you may be prohibited from using it. Prohibition can apply even if the trademark holder is physically located in your state.

It’s important to know that incorporation does not guarantee the right to use your business name in commerce. Incorporation only creates a legal business entity. It does not offer the same protection as trademark registration.

A key case illustrating this distinction is Thrifty Rent-A-Car System, Inc. v. Thrifty Auto Sales of Charleston, Inc., 849 F. Supp. 1091 (D.S.C. 1993). In this case, a South Carolina business incorporated as “Thrifty Auto Sales of Charleston, Inc.” was enjoined (legally prohibited) from using the name due to a trademark conflict with the national “Thrifty” car rental company. The state incorporation of the business did not grant them the right to use the name in commerce because “Thrifty” was already protected under trademark law.

If you’ve recently learned that someone is claiming your business is infringing on their trademark, it’s important to understand how trademark law works. The use of a name that is confusingly similar to an existing trademark can lead to a legal dispute, especially if both businesses operate in the same or related fields. In such a case, you may be forced to rebrand your business and cease using the name.

To prevent this from happening, you should conduct a thorough trademark search before choosing a business name. This step is generally suggested as part of every business plan, especially if you plan to expand beyond your home state.

The best way to protect your business name is to file for trademark protection with the U.S. Patent and Trademark Office (USPTO). Federal trademark registration grants you exclusive rights to use your trade name nationwide, reducing the likelihood of conflict with other businesses.

If you’ve already incorporated your business but haven’t registered your trade name, you should take additional legal steps. It’s important to consult with an attorney who specializes in intellectual property law.

At Twisdale Law, PC, we help with trademark searches, filings, and legal planning. Our goal is to protect your business name from potential conflicts.

At Twisdale Law, PC, we provide comprehensive legal services for businesses in North Carolina, South Carolina, and Tennessee. If you’re concerned about potential trademark infringement or need assistance in protecting your business name, we are here to help. Our experienced team can guide you through trademark registration, help avoid infringement, and assist with resolving disputes if needed.

If you are concerned that your corporate or trade name may infringe on another business’s trademark, or if you need assistance navigating the complexities of business naming, contact Twisdale Law, PC today. We’re dedicated to helping business owners protect their brands and ensure compliance with trademark law.