May 20 2022
May 20 2022

What's the Difference Between a Business Name and a Company Name?

In short, a registered business name is a name you're allowed to trade under, while a company name is the name of a completely separate legal entity registered with ASIC that trades under its own name. When you trade under a business name, you, the person, is still legally the entity doing the trading.

In comparison, if you've registered a company and company name, that company is now the legal entity doing the trading instead of you.

Business Name vs Company Name: Which is Better for Your Business?

For many people, "Business Name" and "Company Name" can sound like they mean the same thing to each other. However, if you're looking to register a business or company name in Australia, this couldn't be further from the truth.

Registering a business name and registering a company name are two completely different processes with different requirements, costs, and results for your business.

This blog will explore the difference between registering a business name and a company name, and then we'll help you decide which is best suited for your organisation.

Advantages and Disadvantages of Registering a Company and Company Name

Registering a company and company name has several benefits. For example, if your organisation were sued when you were trading under a business name, you would be the one taking responsibility. However, if you've registered your company as a completely separate legal entity, the company would be sued instead. Additionally, registered companies face lower tax rates across Australia, saving you some money in the long term. (1)-1

However, registering a company and company name can be extremely costly and more complex than registering a business name. Generally, the benefits of registering a company as a separate entity don't outweigh the costs until your hire staff and turn over at least $90,000 a year. 

It's also important to note that you're legally required to act under the Corporations Act once you've registered your organisation as a company. This means that your decisions as a leader are obligated to work towards the company's growth and profits no matter what other concerns you may have. If you don't comply with the Corporations Act, ASIC may be required to take action against your company.

Should Your Business Register a Company Name or a Business Name?

If you're just starting out with your business, you should probably not register a company. The process can be costly, and the benefits only matter in larger-scale organisations. With that said, if your business has already been growing for some time, or if you have the capital and experience to start your company off with a headstart, then registering a company might be a good idea.

Knowing when the point has been crossed where your business should become a company can be difficult. Working with business consultants like the ones offered with Namecorp's business name registration package can decide how to progress. 

Starting a small business isn't easy. Luckily, you don't have to do it alone. NameCorp can help you get your business ready and off the ground. With business name and ABN registration, trademarking, concierge services, and free membership to Business Australia, we can help you along every step of the process.

Register a Business Name

In the meantime, here are some links you might find helpful: