Business Sales & Purchases

Trading names for sole traders – a guide

A trading name is when a sole trader uses a business name different to their own name. For example: Joe Swift trading as ‘Swift Build Dreams’.

How does a business name differ from a domain name?

There is no formal or legal connection between a business name and a domain name, but obviously a trader will wish to own domain names that match its business names. Domain names are allocated on a first come, first served basis. If someone is already using your preferred domain name then there is little recourse to ask them to hand it over to you.

Choosing a business name

When choosing a business name, the following searches should be made to see if any other business is already using the name:

  • Google search
  • Domain name register
  • Social media search
  • Trade magazines
  • Trade mark registry at the Intellectual Property Office

There is no central register of business names and therefore there is no requirement to register a business name.

Must an individual trade under his or her own name?

No. A sole trader may trade and enter into contracts under a business name as well as, or instead of, his or her own name. However, he or she must display his or her real name in business letters or on invoices.

Can an individual trade under any business name?

No. There are restricted and prohibited business names. For example, names suggesting a connection with government or a public authority)

Can an individual trade under their “actual” name?

  • An individual may carry on business under a name consisting of his or her surname without any addition other than a permitted addition.
  • Individuals may carry on business in partnership under a name consisting of the surnames of all the partners without any addition other than a permitted addition.
  • Permitted additions include, in the case of an individual, his or her forename or initial, and, in the case of a partnership, the forenames of individual partners or the initials of those forenames, or where two or more individual partners have the same surname, the addition of “s” at the end of that surname (section 1192, Companies Act 2006).
  • A sole trader (and for that matter any partnership or company) should not use any business name that might subject it to liability under the tort of passing off, or for trade mark infringement.

How can an individual prevent others from using its business name?

To prevent others from using its business name, an individual will need to do one or more of the following:

  • Register its business name as a trade mark
  • Register its business name as a domain name
  • Incorporate its business as a company

Is it a good idea to sign a business contract with a sole trader in its business name rather than its actual name?

No. Make sure that the contract identifies the individual behind the business name. If this is not done, there may be confusion over the identity of the other contracting party.