Legal Name vs. Trade Name under GST

Prakash Matre
Prakash Matre at June 28, 2022

The Legal Name of the Business is the name that you use for all the official documents to create your enterprise. If it's your personal business enterprise, it's the name on the company papers you document, which is included in the memorandum of association. By submitting the papers, you formally designate the legal name of the business (as mentioned in pan) in the GST of your enterprise. This is the name that comes on the tax ID or employee ID and is the legal name of the business in GST used on your tax returns.

What is Legal Name of Business in GST?

The Legal name of Business in GST for proprietorship (as mentioned in PAN) is the formal, legitimate name of your enterprise that can be identified with the Government. Legal Name vs. Trade Name

What is Trade Name in GST?

A Trade Name in GST is the name your business is normally called and the name which is used for advertising and marketing of your company. A trade name is known as a DBA (doing business as) name. For instance, as we see in the company "Walmart". Walmart's legal enterprise name is Wal-Mart Inc. however its trade name is simply Walmart—it's the name it makes use of on its marketing and website, and what most people refer to it as. However, its legal business name in GST, which seems on all the office work concerning the government (business enterprise filings, taxes, compliance, etc.) is Wal-Mart Inc. Some companies create high-quality trade names for high-quality factors of their corporation.

Legal name Vs Trade name

The legal name is a name that is registered at the time of incorporation of a company or business. The legal name is generally the name of the company on the PAN. The legal name of a business and trade name is one of the key factors that plays a vital role in the success of any business enterprise. Without a doubt, there are tons of factors that determine the success of your company. Your business name is one of the crucial things potential customers notice about your organization. It allows in connecting your customers and allows in interacting with items or/and services supplied by you. With an appealing legal name of business or trade name, your commercial enterprise is one bit closer to being fruitful. With regards to what you name your organization, you want to know whether or not it’s more valuable to use your legal name of business or trade name. You can use a trade name from our trade name examples which is also legal business name while you no longer need to apply your legal name of the business in GST for proprietorship as generally legal name of business ends with LLP, Pvt. Ltd. Moreover, some other fundamental distinction is that legal name of business is normally utilized in authorities while trade name is utilized in classified ads and signboards. Let us apprehend the legal name vs trade name with an example “Urban Company” is a trade name and is generally recognized by everyone. However, the legal name of the business of this corporation is UrbanClap Technologies Pvt. Ltd.

Points to Remember

  1. To verify the legal name and trade name under GST of the taxpayer Form GST REG-06 issued by the authority shall be checked.
  2. In the case of a company or business that is registered under Companies Act 2013, their trade name and legal named can be checked with the help of an Incorporation certificate issued by the Registrar of company.
  3. If it is a partnership firm then in such case their legal name and trade name can be verified using the certificate issued by the Registrar of Firms.

Registration Requirements

If you're forming a private company or an LLP, you're required to register your corporation's legal business name. Registration of the name is simply a part of the legal requirements associated with your company. Whatever name you use in the filings is your legal name of business in GST. A separate registration is not required in that case. Note that before reporting your incorporation papers you may do a name search with the state to decide whether or not the name you need to apply is available. You might be able to keep hold on to a name (with a fee) until you get the papers filed, however that isn't the official registration of the name. You are not required to have a trade name; you can have a business with just the GST legal name. But in case you select to apply a trade name in GST, you'll want to register the name under and comply to trademark legislative requirements.

Mismatch Scenarios

The following are two major mismatch scenarios that are commonly faced: The absence of the trade name on the registration certificate. The difference in legal names under different statutes or laws. However, this can be rectified by amending the legal name or trade name as per the certificate of incorporation. For instance: If a company name in the incorporation certificate is Shree XYZ Pvt. Ltd. whereas in the GST registration certificate it is Shri XYZ Pvt. Ltd. So in this case, the name in the GST registration certificate shall be corrected as per the name mentioned in the incorporation certificate.

The Bottom Line

Through the above statements, we can conclude that the trade name and legal name of the company/enterprise or partnership are two different things. Further, these names shall not be interchangeably used. Lastly, it is important to know the difference between legal name and trade name.

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