The State/Territory based business name registration system is to be replaced by a new streamlined national system. This is expected to commence in April 2011, provided that legislation is passed in all Australian jurisdictions.
As part of the regulatory reform agenda of the Council of Australian Government, the State and Territory Governments have agreed to refer their powers for business name registration to make way for the national system.
Like the current system, businesses must register a business name if they carry on business within Australia under a name that is different to their own entity name. This allows for the person or company behind a business name to be easily identified.
However, the purpose of the proposed new system is to provide for a uniform online registration process for both business names and ABNs, and offer other business information services (eg trade mark and domain name searches) to help reduce the burden on business.
Key features of the new system
- The new system will be managed by ASIC (in association with other organisations such as ABR and IP Australia).
- Businesses will only be required to register a business name once, regardless of how many States or Territories those businesses operate in.
- To register a new business name, businesses will be required to
- have an ABN, or
- be in the process of applying for an ABN and not have been refused an ABN.
- The system will provide for online registration in conjunction
with ABN registration. So, businesses will be able to register a
- online with ABR when applying for an ABN (at www.abr.gov.au), or
- online with ASIC if they already have an ABN (at www.asic.gov.au).
Similar to the existing system, there will also be a paper based application form.
- The fees for registration and renewal will be the uniform and
lower (except in the Northern Territory) and there will be options
for one or three year registration periods only. The costs for new
business names and renewals will be:
- One year: $30
- Three years $70
This replaces the current fractured system which has different fee structures and registration periods.
- In terms of selecting and searching for names:
- there will be an online test applied to determine registrable
names. For example, a name will not be registered if it is:
- identical or nearly identical to a registered business name, company name or a name on the National Names Index (i.e. names of cooperatives, associations and limited partnerships etc), or
- inappropriate, misleading, offensive or deceptive
- the system will allow businesses to conduct trade mark searches during the application process. It will still be the business' responsibility to ensure that the business name does not infringe any trade mark, and
- some ownership and business contact details for business names currently registered in Australia will be accessible online for free at www.asic.gov.au. More detailed information (including the business address for home-based businesses) will be available for purchase.
- there will be an online test applied to determine registrable names. For example, a name will not be registered if it is:
Impact on franchise systems
If a franchisor requires its franchisees to trade under a specific franchise/business name, then the franchisee will still need to register that name. Typically, this name would incorporate the franchisor's brand and a particular suburb or region.
The key change is that franchisees will no longer need to provide ASIC with written consent from the franchisor for the registration of the new franchise name. But, franchisees will need to ensure that they have the right in their franchise agreement to trade under that name. Applicants will be reminded of this during the application process.
Registration of a business name does not in itself provide a business with any proprietary rights to that name. This can only be achieved by registering a trade mark.
We will continue to update you the progress of the proposed new system via Franchising Focus.1
1 The article is based on information provided by the Australian Government's Department of Innovation, Industry, Science and Research in one of its recent Consultation Forums and also the website of COAG
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.