The Corporate Name is a denomination that is known collectively in a company. This is a legal and official name, which appears in the document that allows the legal entity in question to be built. The business name is used at the formal, legal and administrative levels.
This would be its legal attribute, which appears in the deed or document that reflects its creation. In the document, you can identify both the legal person and all the members of the company and also gives security regarding their legality.
The concept of the business name is better understood when we compare the name of a person with that of a company. The name is an attribute that gives us an identity and allows us to distinguish individuals from each other. The Corporate Name works the same way. The Corporate Name allows it to be legally different from the rest.
Characteristics of the Corporate Name
In the next section, we will know the characteristics of a Corporate Name, which will help us to better understand what it is and what we should consider:
- At the time of establishing the name, which will shape the Corporate Name, we are required to include the name of the partners. If the case exists in too many partners, this should be included “and in the company” or a similar term.
- At the time of setting up a company, the main requirement is that the Corporate Name to be used to be completely unique in the national territory. If at the time of incorporating the company there is another that has the same legal name, another alternative should be sought. In no case can there be two companies with the same company name. It should be taken into account that it is the name that will be used for administrative and legal purposes. An example of its use is when hiring an employee, the company name must appear in the contract.
- The acronym of the type of this type of company must be exposed to the legal name of the company. These are some examples:
- Public Limited Company: In all cases, the acronym PLC must be at the end of the company’s corporate name. Example: If you have a company and you want the legal name to be “Chocola”, in the case of being a PLC its business name would be “Chocola PLC”
- Limited Partnership: Acronyms must appear at the end of the legal name of the company. It is a company name that is formed from a reference to the corporate purpose or with the combination of the name of the partners.
- A company by shares: In this case, the abbreviation CBS must be located at the end of the legal name of the company. Following the previous example, the company has to be called “Chocola CBS”.
- Collective Societies: In this case, when talking about collective companies, whether civil or commercial, in this case, you must find the name of the partners that configure it followed by the abbreviation CIA. Following the previous example, the name of the company “Chocola” would remain as a brand name and the business name would include the name or surname of the partners. Example: Mike, June, and CIA.
If you want to make some kind of modification in the legal name, it is necessary to carry out a reform of the statutes so that the name modification is correctly reflected.
Difference between Corporate Name, Brand and Commercial Name
For some, the trade name with the Corporate Name or the brand with the Corporate Name must be similar. The truth is that these terms are very different from each other. In some cases, there is usually some confusion, but there are elements that help distinguish these three concepts. Here, we explain how to differentiate them and avoid confusion:
- A Brand: The brand is the fastest way to distinguish our services and competitive products. You can compare the brand with the artistic name of a star. For example:
- Brand: Johny Depp;
- Real name: John Christopher Depp which is the corporate name.
- Commercial Name or branding: It is the name by which we want our clients to know us in the market. It is a name that helps us differentiate between the competition. Commonly, they are simpler names than the social one so that it is easier to engrave in the client’s mind.
In some cases, the brand and trade name may match. In other cases, the same company name may contain several names and trademarks to refer to or add different products and services to the market.
- Corporate Name: It is the term that identifies the company at the legal level. This name helps us to be recognized as a legal entity. The denomination allows you to have legal rights and obligations.
These three terms cannot be confused in the company since they are different at the legal level and allow us different things. When one is allowing us to place our products and services on the market, another is the legal name, the way in which we are identified as a company. It is at your choice to have the same business name, trade name, and brand or create completely different names.
Importance of the Business Name
When you start new business activity, you should be familiar with the new terms that will be used in the process. Not knowing the terms, these add to the little experience making the learning process and adaptation more complicated. Although they are normal processes for the new entrepreneur, it is important to know so that the company name is used.
Although it is not a very relevant knowledge, it is one that allows us to differentiate from the rest. Knowing what the company name is, when and how it is used and how it differs from the rest, gives a lot of value to the work experience. It is important to know any of these terms since a moment of starting a venture, it will be much easier to specify a name for the company and brand.
Remember that the business name is what will differentiate you from other companies, so it is important to know its concept.