The difference between a business name registration and a company registration

The difference between a business name registration and a company registration

Business Name Registration

A business name is simply a trading name; it is the name your business is known as, but it is not a legal entity.

Key Features:
  1. Registered through ASIC (Australian Securities and Investments Commission).
  2. Tied to an individual (sole trader), partnership, or company.
  3. Used for marketing and branding purposes.
  4. Does not offer any legal protection or liability shielding.
  5. Cannot enter into contracts, open a business bank account, or own assets on its own.
Common Use:

You’re a sole trader or partnership and want to trade under a name that isn’t your personal name or legal entity name.

Example:
If Jane Smith is a sole trader and wants to run her business as Smith Creative Studio, she must register Smith Creative Studio as a business name.

Company Registration

A company is a separate legal entity that is capable of holding assets, incurring debts, and entering into contracts in its own right.

Key Features:
  1. Registered with ASIC under a unique Australian Company Number (ACN).
  2. Offers limited liability to directors and shareholders.
  3. Can sue or be sued, own property, and trade in its own name.
  4. Must meet ongoing legal and financial reporting obligations (such as annual reviews).
  5. Can also register a business name if it wants to trade under a different name than the company name.
Common Use:

You want a more structured, scalable business setup, potentially with multiple owners, limited liability protection, or future investment opportunities.

Example:
Smith Creative Pty Ltd is a registered company. It may also register a business name like Smith Studio to use for its branding.

Do You Need Both?

You only need a business name if you're a sole trader, partnership, or company and want to trade under a name that’s not your legal name.

You need a company if you want to:
  1. Create a separate legal entity
  2. Limit personal liability
  3. Plan to grow, scale, or bring on partners/investors
And if your company wants to trade under a different name than its registered name, it must also register a business name.

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