Trade name and legal name are often misused and sometimes lead to confusion to users. Some business owners assume that their chosen business name and the name that they had registered to the state has unlimited use in relation to their business. It may look or sound the same but we ask, is there any difference? Will it have legal implications? Understanding both concepts can give us directions on its proper usage and also to better represent the company.
A trade name is what a company generally considers to engage in business dealings. It is mostly for advertising and marketing purposes of the company to be distinguished from the rest of the companies. The trade name supports the impact of memory and choice when it comes to advertising. Thus, having a trade name that stands out is mainly for marketing purposes.
A trade name is also known as a ‘fictitious name’ or ‘doing business as’ (DBA). As such, the trade name does not include ‘legal endings’ like Inc., LLC or Corp. Most often, the trade name is what the general public sees or being oriented. It is what we see on the signs, online pages and mostly in advertisements.
With the growing number of businesses, the right to use a trade name is being accorded to whoever has used it first publicly, the first to make the trade name visible and has continuous use of the same trade name.
On the other hand, a company’s legal name is the name of a person or an entity that owns the business. When a business is a partnership, the legal name applied is what was provided in the partnership agreement. It could be the last names of the partners. For limited liability companies (LLCs) and corporations, a business’ legal name is the registered name with the state government. More often, these names have ‘legal ending’ such as LLC, Inc. or LLP.
Simply put, the legal name is used in the articles of association and the name registered with the state government. The legal name is mainly used to identify the legal person or an entity unlike the trade name which has a marketing purpose. More importantly, the legal name is applied when communicating with the government or other businesses. For instance, a legal name should be use when filing for tax returns, applying for government permits, property acquisition, using bank check payments and the like.
To site the difference, the American multi-technology company known publicly as Apple has the legal name of Apple Inc. Canada-based telecommunication and wireless equipment company identified as Blackberry currently uses the legal name Blackberry Limited. It was formerly known as Research In Motion Limited. Garmin is the company recognized for its wearable GPS technology on sports activities and utilities. It uses Garmin Ltd. as its legal name. And the company that concentrates on imaging products and commonly known as Kodak has the legal name of Eastman Kodak Company.
Based on the examples, it can possible that the same legal name and trade name is used for consistency and oneness of the brand that the company carries.
The biggest company in terms of revenue worldwide is creating a lot of buzz in the business news section today. Walmart, with 11,000 stores in 28 countries, had its stock price suddenly dive to less than 60% in October 2015 from January’s 90%. Last January, Walmart announced closure of 269 stores around the world, 154 of which are located in the United States. The company is set to focus more on is supercenters and e-commerce.
Aside from the stock price downward movement, Walmart has also been talked about for some time now because of its company policies. Taking into account all the reports published against Walmart, here are some things we can learn from its plight:
- The decision to globalize should be made after thorough examination and planning. After successful profits around the USA, Walmart immediately jumped to the globalization decision mostly because it was the only way they’ve seen to grow. Yes, they could also afford it, to some extent and to limited countries, but being able to finance it doesn’t automatically means you have to go for it. This is not to say that the decision was wrong, this merely means that a thorough research and judgment must be undergone before venturing in globalization.
- Labor relations is very vital to the success of any organization. Time and again, numerous successful businesses remind us that people are assets, one should never take them for granted. Multiple cases have been filed against Walmart in relation to labor relations – wrongful termination, child labor, prison working, exploited benefits and even wage thefts. As such, negative articles about Walmart have also been piling up in the news, The Daily Dot for example has an article entitled “10 Reasons Walmart is the Worst Company in America”, citing its anti-union policies are getting worse all the time.
- Do not compromise your assets for short-term bigger profits. Aside from neglecting their employees’ needs and rights, Walmart also seemed to neglect other assets like suppliers and infrastructure. Poor work conditions and accusations on predatory pricing and monopolistic practices have been reported. The company looks like they have been foregoing some workplace standards to cut on costs and at the same time ignoring good relationship with suppliers, pressuring them to offer supplies at lower cost. One of its supplier, Kraft, closed 39 plants due to loss accumulated from supplying Walmart.
- Do not stop re-evaluating your management team and company policies. Walmart may have dismissed this completely or consciously disregarded this for as long as the company hits the target profit. The bottom line must not be the only measure to a successful organization. Choose a team that embodies right and truthful practices and truly cares for the people and the business. Corporate strategies created in bad faith puts the company’s sustainability at risk.
The world looks at Walmart as a greedy company. One who lures in customers through their low prices in exchange for so many abused rights. It profits because it gives what the customers want while at the back of it all, the community is hurting, the economy is not improving and the employees uncared for, and to top it all off, the company is losing money.
About the Author
“Murray Priestley has 25 years of commercial and asset management experience having served in board, CEO and senior executive positions with a number of global public and private companies.”12.14.15
A lot of us have been wanting to finally kick off that dream business, small or big, it doesn’t matter. What truly matters in business start-ups are your attitude and your capital. We will reserve the attitude topic on the experts and focus on the capital side of starting up your first business.
Finding sources of capital could be a tedious and stressful at times. There’s your savings, your family and friends, angel investors, banks, and other financing entities. There also exists what we call venture debt.
What is venture debt?
Venture debt is a loanable amount provided by specialized banks or financial institutions to entrepreneurs, old or new business, to fund working capital. Usually structured in a three-year loan way, venture debt claims company stock as payment.
This option is best for those who could not afford traditional debt financing and require or flexibility in their finances. When structured and managed effectively, venture debt is the best risk capital form a business can utilize.
How is it helpful in starting up a business?
In the business world, especially in the early stages, milestones are very important but critical. The main objective of any owner is to increase the value of the company. This value is manifested during the future rounds of financing and initial public offering or IPO. The development of the business and the significant increase in value are dependent on the capital invested in. It has been proven that the valuation of startups is higher using a debt and equity formula compared to equity alone. Venture debts help entrepreneurs in securing capital intended to improve the valuation margin for the next round of financing, help the business achieve milestones and to avoid dilution by having additional capital at an earlier time.
In comparison to traditional equity financing or loans, venture debt is faster and easier to arrange. Venture debt financing does not necessarily conduct valuation to applicants which makes the process efficient to both parties. This time buying and added capital are helpful in advancing in a new round of equity financing, improving competition among other companies and plus points in getting that equity loan approval. This is also a big help during a pre-selling period and to avoid price negotiations between the management and the investors.
Interest rates of venture debts average from 10 to 15 %. Repayment is generally on a monthly basis and has no financial covenant. Interest rate is higher compared to convertible debt and a traditional working capital loan but the latter two also stay behind venture leasing in terms of flexibility and immediate support to business that is crucial in achieving its financial goals.
Venture leasing has been around for a long time now but many are still hesitant to try because of the risks involved and the growing fear of scams worldwide. With sufficient knowledge and right judgment call as to which firm to trust, venture debt can be your top key to a successful and sustainable business.
Murray Priestley is has 25 years of commercial and asset management experience having served in board, CEO and senior executive positions with a number of global public and private companies. Murray’s experience covers IT outsourcing, private equity and asset management.
About the Author
“Murray Priestley has 25 years of commercial and asset management experience having served in board, CEO and senior executive positions with a number of global public and private companies.”11.27.15
Products and services are accessible now where anyone can start up any business of their interest with less difficulty. With technology, the right amount of capital and the right attitude, anyone can operate a business. Also, small businesses continue to thrive with the guidance of business acceleration. With this, entrepreneurs are provided with outlines or templates on how to carefully start on their business through customized programs, contact to mentors, talents and capital. Some businesses may take up on the idea of business acceleration and there are some that are still disengaged with it. Not all accelerators are of the same standard. Here are three reasons to benefit from an excellent business accelerator:
1. Acceleration: Simply put, is the increase of rate or speed. In business, it could be regarded as the objective of any company that started up small, then increased its presence in the marketplace and eventually have its own niche in the market with a signature product or a specific service for a short timeline. Taking into account also are some of the losses and slip ups encountered during the process. If one aims to build the business faster, it should be able to measure faster by employing business experiments, testing or monitoring. The results that came up from the testing will allow the business to learn faster which will provide action plans for product development, efficient practices or propositions on future expansions.
2. Talent: Business acceleration programs involve people with competency skills that will aid the improvement and growth of the business. These talents that take part of the program can become a team member who share the same vision or drive to develop a business following the program. You gain access to talents who act as mentors with immense experiences on the field. They will be able to provide advice or feedback which can be applicable to the business condition. But of course, one has to discern which opinion is valuable to the business in order to implement better and dependable solution to varying situations. Apart from the association to fellow accelerators, one can also exchange ideas with a network of business incubators thru the program. Business incubators help new and start up companies by focusing on the early stage of the business. Both accelerator and incubator prepare companies for growth. For the incubators, they provide focus on business skills training, access to finance and professional networks. It mainly provides the necessary tools and advice for the business to be established and to be fully operational on its own as a new entrant in the field.
3. Capital: Any business would not proceed without enough capital to cover expenses and maintain operational costs. The assistance that business accelerator offers in relation to capital is an opportunity to present to an extensive audience and allows entrepreneurs to highlight accomplishments given a short period of time and come up with raising or augmenting investment capital of the business. This part of the program may be a hard sell to some but in effect, it could also lead to another opening of collaborations and connections to other business or product integrations in the future.
About the Author
“Murray Priestley has 25 years of commercial and asset management experience having served in board, CEO and senior executive positions with a number of global public and private companies.”11.13.15
Businesses start with an idea. Some ideas linger. Some would start with just a glint of strategic location, a marketable asset or even a trendy hobby. The end goal of which is to turn it into something bigger, useful and profitable. There are a many challenges of building a business and young entrepreneurs are aware of it. There is the limitation of resources, capital, profits, talents and time. There are also external factors that add extra challenge such as existing competitors who are already ahead of the game and are better equipped than you.
Despite the fact that a new, innovative product or service is more beneficial, the market may not be aware of it, which results in customers that are not informed of your product or service which leads them to an inaccurate choice. For the business, this will lead to question on how to create something out of nothing and how to develop initial success turn into continuous growth. Here are principles drawn out from dealing and working with big companies of varying sizes.
1. Businesses employ a mixture of various strategies, execution and competitive advantages in attractive markets. It is necessary that one customizes its operations and financial models to maintain production and provide sound financial decisions for the company. This will also allow the business to tweak certain parts of the operation to become more efficient.
2. As any business starts with an idea, such idea should be backed up with effective action plans that targets on creating value for the customer. Develop customer loyalty program as a way to recognize a customers’ continued patronage on the product or service availed.
3. Test and learn approach is an effective experimental test which follows a set of practices that enables the business to receive real-time customer feedback and response. It also determines the measures on the return of incremental investment.
4. For larger companies, they can provide more and better ways of improvement for the business in terms of machine, capital or resources. Although, it can be pointed out that they often lack management talent, incentive programs and strong organizational skills to foster entrepreneurial growth. Linking business approaches with an entrepreneurial value and culture allows a long term business significance that is fostered with loyalty and passion from the management team.
5. Excellent strategies to consider involve comprehension or awareness of the facts regarding customers and markets. Management team can bring into perspective of the best strategy if they can connect with the customers’ needs and market requirements. This can be brought about by establishing a unique branding of the product or service or how the business treats the customers.
6. The value of the customer should not be under estimated. Any business should identify the value of a customer as a core to any business strategy. The customer may not always be right but his feedback is important in the evaluation of a certain product or service. On one hand, not everyone can be your customer but they can also serve as referrals to future customers you will be dealing with.
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