A trade name (also called DBA, "doing business as," fictitious name, or assumed name) is the name under which a business operates and is known to customers. This often differs from the legal entity name registered with the Secretary of State.
Trade Name vs. Legal Name
Who sees it
- Trade Name: Customers, public
- Legal Name: Government, legal documents
Example
- Trade Name: "Green Thumb Landscaping"
- Legal Name: "GTL Services LLC"
Where registered
- Trade Name: County/state DBA filing
- Legal Name: Secretary of State
Purpose
- Trade Name: Marketing, branding
- Legal Name: Legal identity
A single legal entity might operate under multiple trade names. Multiple legal entities might use similar trade names in different markets.
Why Businesses Use Trade Names
Branding
- Legal names must be unique in the state; trade names allow preferred branding
- "John Smith Enterprises LLC" can operate as "Smith's Auto Repair"
- Professional service firms use partner names but may brand differently
Privacy
- Sole proprietors can operate under a business name rather than their personal name
- Owners may want public separation from the business
Flexibility
- Test new brands without creating new entities
- Operate multiple concepts under one legal structure
DBA Registration
Most jurisdictions require businesses to register trade names:
Where DBAs Are Filed
- County level: Most common for sole proprietors and partnerships
- State level: Some states require state DBA registration
- Both: Some jurisdictions require both
Registration Requirements
- Legal entity or individual name
- Trade name being registered
- Business address
- Nature of business (sometimes)
- Filing fee
Consequences of Not Filing
- May be unable to enforce contracts under trade name
- Banking difficulties (accounts require DBA certificate)
- Potential fines
- Legal complications
The Entity Resolution Challenge
Trade names create verification complexity:
The Problem
Application says: "Green Thumb Landscaping"
State records show: "GTL Services LLC"
Without entity resolution, these appear unrelated. The business is legitimate—it just applied under its trade name.
Resolution Approaches
- DBA record matching: Link trade names to legal entities via DBA filings
- Web data: Websites often list both names
- Multi-source verification: Cross-reference trade and legal names
- Fuzzy matching: Identify abbreviations and variations
Trade Names in KYB
Verification Steps
- Collect the name provided by applicant
- Determine if it's a trade name or legal name
- If trade name, find the associated legal entity
- Verify the legal entity exists and is in good standing
- Confirm the trade name is properly registered
Common Issues
- Unregistered DBAs: Business operates under trade name without filing
- Multiple matches: Trade name links to multiple possible entities
- Expired registrations: DBA was filed but not renewed
- Cross-state confusion: Same trade name used by different entities in different states
Risk Considerations
Trade name usage isn't inherently risky, but consider:
- Is the DBA properly registered?
- Does the legal entity behind it exist?
- Is there a pattern of name changes?
- Does the trade name obscure problematic ownership?
Key Takeaways
- Trade names are operating names distinct from legal entity names
- Most businesses use trade names for branding and customer recognition
- DBAs must typically be registered at county or state level
- Entity resolution must connect trade names to legal entities
- Verification requires checking both the trade name registration and underlying legal entity
Related: Legal Entity | Entity Resolution | Business Identity
