By Matthew Hall, Partner and Sam Dempster, Solicitor.
New law is being considered to register business names nationally. If passed, the regime will differ significantly from current provisions, where business names are registered on a state by state basis.
Existing law and the proposed National Register
Under existing law, businesses must register their business names if they carry on business in Australia and are not trading under their own name (i.e. an individual's name, partners' names or a company name). This requires a separate business name registration in each state or territory where business is carried on.
Under the new regime, which is proposed to take effect from April 2011, all states and territories will refer their powers to the Federal Government so that the application, registration and renewal of business names will be governed under a National Register.
Under the National Register there will no longer be a need to register separately in each state or territory. One application and one payment will be made, giving recognition in all states and territories. There will be lower fees for registration ($30 for 1 year and $70 for 3 years) and renewal (except in the Northern Territory where there will be a small fee increase).
The Australian Securities and Investments Commission (ASIC) will manage and administer the National Register.
Business names and ABNs
Under the National Register, new businesses must hold an ABN to apply for a business name and will be able to register for an ABN and a national business name under a single integrated online system. There will still, however, be the option to comply with these requirements through a paper based system.
As the registration online of a business name will be instantaneous, those businesses that do not have an ABN will be allowed to apply for a name, during which time the name will be "pending". During this time the name will not be able to be registered by anyone else. Upon approval and payment for the business name and approval of the ABN, the name will be registered in the National Register. If the payment for the business name is not received within seven days, or if the allocation of an ABN is not received within 28 days, the name will not be registered and will then become available to another business.
Current business names under state and territory based regulation will automatically be transferred to the National Register. If these business owners do not have an ABN they will not be obliged to get one on transfer to the National Register. An ABN will also not be required for the renewal of these pre-existing business names under the National Register. However, these business owners, whilst registered under the new system, will be unable to register for an AUSkey, which is a new online security credential allowing access to government online services. More information about AUSkey can be found at the ATO website.
ASIC searches of the National Register
A free government search register will be provided by ASIC, showing the business contact details, address and ownership of any business that has a registered business name (home-based registered businesses will only have their suburb listed on the free online register). Detailed extracts on businesses listed on the register will also be able to be accessed through ASIC for a fee (for example, the address for home based businesses).
Businesses will be able to seek to have their details suppressed on the search register.
Business names which cannot be registered
Business names will not be registered if:
- The name is identical, or nearly identical, to an already existing registered company or a business name or a name on the National Register;
- The name is likely to be offensive;
- The name suggests a connection with the government (unless ministerial approval is obtained);
- The name contains unacceptable characters (eg a foreign language character); or
- The name contains restricted words that require a particular body's approval to be used (eg ANZAC).
The new system will allow for the registration of a business name that only differs by location, regardless of whether or not there is a similarity in the goods or services provided, for example Bob's Newsagency and Bob's Newsagency Kensington.
Protected titles, licensed trades and franchised businesses
The online system will not prevent the registration of protected titles such as doctor or lawyer, or licensed trades, such as electrician. However, applicants must hold the relevant Australian qualifications, memberships or approvals to use their business name, so as to not mislead the public.
Identical to current provisions, if a franchised business is not trading under its own entity name (eg franchise name), that business will need to register the franchise name. A business that applies for a franchise name will however need to ensure it has the authority to trade under that name under the franchise agreement.
Business names and proprietary rights
It is still important to remember that registration of a business name does not itself give any proprietary rights in the name. Only registered trade marks give this kind of protection. Under the new online application system there will be a streamlined information link to trade mark and domain name searches. It is still the applicant's responsibility to seek independent legal advice to ensure that the name does not infringe the intellectual property or other rights of another person in Australia.
Swaab was recently named a 2009 Winner in the ALB Employer of Choice awards, and was winner 'Best Law Firm in Australia (Revenue < $20m)' and 'Attribute Award for Exceptional Service (Australia Wide)' in the 2008 BRW- Client Choice Awards.
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.