Last updated January 30, 2024
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What is an Assignment of Trade Name?
An Assignment of Trade Name legally transfers the ownership and rights of a trade name from one business entity to another.
This transfer may occur for various reasons, such as the sale of a business, a change in business structure, or the rebranding of a company.
Reminder: A trade name is the public-facing name under which a business operates and interacts with customers while the legal name is the official one that appears on government and legal forms.
A trade name is a type of intellectual property and is also known as a DBA (doing business as) name.
Suppose a wedding photographer named Alex operates her business as a sole proprietorship. She registers her business under her legal name, Alex Smith. However, when marketing her business to clients, she uses a trade name (e.g., Eternal Moments Photography).
Parties to an Assignment of Trade Name
There are two parties involved in an Assignment of Trade Name: the assignor and the assignee. Here’s what each role means:
- The assignor is the party transferring ownership of a trade name.
- The assignee is the party receiving ownership of a trade name.
Assignors and assignees can be individuals, organizations, or corporations. Also, there can be multiple assignors or assignees.
The purpose of an Assignment of Trade Name
An Assignment of Trade Name serves several important purposes, including the following:
- Records the legal transfer of ownership: The primary purpose of an assignment form is to facilitate and record a trade name’s ownership transfer to a new owner.
- Ensures compliance with regulations: Some jurisdictions require the formal assignment of a trade name to be recorded by the appropriate government agency.
- Protects both parties’ rights and interests: An assignment form ensures the assignor is no longer responsible for the trade name and the assignee has the legal right to use it.
- Provides clarity about the transaction: The document outlines the terms and conditions of the transfer, including any financial considerations.
- Helps enforce trademark rights: If a trade name is also registered as a trademark, the Assignment of Trade Name can help the assignee enforce the trademark rights.
- Helps the assignee complete due diligence: In cases where a business is being bought, the Assignment of Trade Name is a crucial component of due diligence because it ensures the buyer obtains all the rights connected to the trade name.
How to write an Assignment of Trade Name
To create an Assignment of Trade Name, complete the following steps:
List the names and addresses of both the assignor and assignee. Generally, you should use a party’s legal name. If you’re assigning a trade name to a business, use a business address, if possible.
2. Provide details about the trade name
Next, state the trade name that’s being transferred and specify whether it’s registered.
If the trade name is registered, specify the place of registration and a registration number.
3. State the price of the assignment
Besides stating the price of the assignment, specify when it’s payable. A price could be payable upon execution of the assignment document, a specified date, or another event.
4. Add additional clauses (if necessary)
It’s likely not necessary, but you may add additional clauses to your Assignment of Trade Name. For example, if you want to make the assignment conditional, you may add a clause that outlines the conditions.
5. Sign the assignment
To make an Assignment of Trade Name binding, both the assignor and assignee must sign it. The parties may also get the Assignment of Trade Name notarized by signing it in front of a notary public.
Once signed, you may also have to register the assignment with the appropriate government office.
Do I need to register an Assignment of Trade Name?
In Canada, trade names must be registered in all provinces and territories except Newfoundland and Labrador. So, after using an Assignment of Trade Name, the new owner (i.e., the assignee) may need to re-register the trade name with the appropriate office.
Does a Trade Name Assignment need to be notarized?
Notarizing an Assignment of Trade Name can be beneficial because it:
- Verifies the assignor’s and assignee’s identities and signatures
- Confirms that each party is signing the agreement voluntarily
- Confirms that everyone is competent to understand the contents of the agreement
Notarizing an Assignment of Trade Name may not be compulsory, but it can add a layer of protection and credibility to the document.
