Business Names Act for Sole Traders

A trading name is like using an ‘alias’ - additional to your name as the person who owns the business.

United Kingdom

The main purpose of the Business Names Act 1985 is to enable customers and suppliers to know with whom they are dealing, when a business operates in a name which is different from the name of the individual owner.

Sole trader

Doing business solely under your name means you do not need to have a unique business name - after all, it is your name.

The sole trader is you. You have your own name and address. You can enter into contracts and issue invoices and receipts and carry on the business in your name, using your home address or your business address.

You can use -

Your full name, such as Andrew Mann
Your initials and surname - A Mann
Or your surname with a common abbreviation of your forename - Andy Mann

No nicknames permitted!

Trading name

You can also choose to do business under another name: a trading name.

E.g. Andy Mann trading as ‘Andy’s Gardening Services’ or as ‘AM Painting and Decorating’ or ‘Home DIY Rescue’.

The trading name does not have a separate identity from yourself. It is like using an ‘alias’ - additional to your name as the person who owns the business. A trading name is another name for carrying on your business; it does not create a separate business entity.

If you use a trading name, the Business Names Act applies:

You must comply with the disclosure rules.

Tips:

Before you decide to run your business under a trading name, do get professional tax advice or check with HM Revenue & Customs. If you want to operate a different line of business under a trading name - or operate under two trading names - you might find you have to make two tax returns each year.

And do talk to your bank about your account name, cheque book and receiving cheques made out to your trading name.

If you are VAT registered you must also notify HM Revenue & Customs.

Disclosure of owner

The Business Names Act requires that you give the owner's name and address on business communications under a trading name. This applies specifically to business letters, purchase orders, invoices, receipts and written demands for payment.

For example:: Andy’s Gardening Services; Proprietor - Andrew Mann; 1 Letsby Avenue; Upham; Buckinghamshire RU4 8UG

Tip:

You should use the address of your home or business premises, not a PO number. There could be potential problems if you use a mail box service or correspondence address and do not collect your post every day. If legal proceedings are served, you can’t waste a single moment in dealing with the matter!

A trading name must also be displayed prominently at your home or business premises.

The Act does not require you to publish the name of the proprietor on your website as well. However, the Ecommerce Regulations require certain information about your business to be shown on websites and emails too.

Click here to learn about the legal position of Partnerships

Or learn about Limited companies

About the author:

Mac McInerny is a director of MC Management & Communications Ltd and topenterprise uk ltd. He has an Honours degree in Law and his formal training includes sales, marketing and financial and management accounting.

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Footnote

This article is intended to contribute to informed decisions by business owners, directors and managers. It does not constitute professional advice in all individual cases and should not be interpreted as giving specific advice or guidance.

Before making a decision to take any action you should make your own appropriate enquiries and seek legal, financial and other relevant advice from a qualified person or body. See terms of use for further information.

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