On 3 July 2008 the Council of Australian Governments approved the establishment of a national business name registration system. This system, which has been announced by the Australian Securities and Investments Commission (ASIC) as coming into effect on 28 May 2012, will replace the current 'state by state' business name registration system.
Currently, business names are registered with the Office of Fair Trading in the state or states in which the business trades. The new system will pass the responsibility to ASIC. ASIC will have sole responsibility for registering, renewing and administering business names for all Australian businesses.
Why the Change?
The national system is being introduced in order to cut red tape and with the objective to save businesses time and money. Under the national system, businesses will pay one fee for registration and only be subjected to one process in order to register the business name nationally. The current system involves different fees and application processes throughtout Australia.
The national system will also provide greater certainty to the public as many businesses operate under a trading name that is different from the name of that individual or corporation. Under the national system, any business that does not operate under its own entity name must register its name and record its details on the national register. Searches of this register will enable consumers and other businesses to determine the identity of the entity behind the business name.
How will the system work?
Transition to the New National Register
When the national business names register commences operation, all existing business names will be transferred from state and territory registers to the single national register. Before the commencement of the national system, the states and territories will finalise any in-process transactions (for example, business name renewals).
On commencement of the new national system, ASIC will take over management of the system and be responsible for maintaining and updating the register.
Process for registering or renewing a business name
Businesses will be able to register a business name by completing a single online registration on the Australian Business Register website located at https://abr.gov.au/
Accessing business name information
The public will be able to access certain details about a business name for free by accessing the register online. Details available on a search of business names include the name of the business contact, the principal place of business and the identity of the owner of the business name. Searches of home based businesses will only show their suburb.
The free online register will be maintained by ASIC. The public can request further information for a $20.00 fee.
Australian Business Number (ABN)
To register a business name under the new system, new businesses must have an ABN or be in the process of applying for an ABN.
Otherwise, it will be possible for applicants to seek registration online for both a national business name and an ABN. As it can take some time to register an ABN (currently up to 28 days), the preferred business name will be held so that nobody else can register it until the ABN is issued.
All business name registrations will be transferred to the national business name register on commencement of the national system. This will result in identical business names being registered by different owners in different jurisdictions. In cases where the same business name exists in different states or territories, the new national business name register will carry a location identifier.
For example, there may be a "Kellys Locksmith" in Queensland and a "Kellys Locksmith' in New South Wales - both names will be carried over onto the national register. ASIC may insert (QLD) and (NSW) on the register, as appropriate, to distinguish between the business names. If this occurs, not only would another business not be able to make a new application to register "Kelly's Locksmith", but also it would not be able to register "Kellys Locksmith Queensland" or "Kellys Locksmith New South Wales".
The business name itself will not include the location identifier. This means that businesses are free to continue trading under their existing name.
If a business name owner has registered the same name in different states or territories, the business name registrations will be merged into a single registration on the new national register.
Where a conflict arises (for example, where an applicant seeks to register as a business name, a name that is already registered), ASIC will conduct an automated test to determine whether a particular name can be registered. A name will be registered unless:
- The name contains foreign language characters;
- The name contains restricted words which require consent of a particular body to be used;
- The name is likely to be offensive1;
- The name suggests a connection with government (whether local, state, federal or foreign), government departments, agencies, Royal family etc, where no such connection exists; and/or
- The name is identical, or nearly identical to2, a registered company or business name (or a name on the national names index which lists names of cooperatives, associations, limited partnerships etc).
Third Party Seeking Removal of a Name
If a party considers itself aggrieved by ASIC allowing an applicant to register a particular name, that party can seek review by ASIC. This will only be permitted where the name objected to is not grandfathered (or carried over) as part of the transition to the national system and there is a real risk that the aggrieved party will suffer substantial detriment because of the registration of the business name.
For the review to be considered, the application must be received by ASIC within 15 months of the date of registration of the name being objected to. ASIC has the discretion to extend this period.
Costs are likely to be less than the current business name registration system. Businesses can choose to register their business name for a one year period ($30.00) or for a period of three years ($70.00).
Registering an ABN will remain free.
The national business names registration system is expected to commence on 28 May 2012.
This will only occur if relevant legislation is passed first in all jurisdictions. Currently, the states and territories are each introducing legislation. There will be comprehensive publicity to ensure that the business community, business intermediaries, industry associations and consumer groups are aware of the changes.
What Should You Do Now?
If you currently have business names registered, you should maintain those registrations under the state or territory system until the new Business Names Register comes into operation. No specific action will need to be taken as your registration(s) will be carried over automatically onto the new register.
If you are considering currently registering a business name, it may be preferable to seek registration on a state register prior to the commencement of the national system. This will prevent any risk that another person may register the business name:
- prior to the commencement of the new system in any one state or territory before you; or
- after the commencement of the new national system.
Registration of a business name in this manner by another party will prevent you from registering your business name nationally under the new system. Registering your business name before the commencement date of the national system would avoid you having to pass the more stringent test in relation to duplicate and conflicting names. However, the registration of any business name must be done with the intention to commence trade shortly after registration takes place.
Once the national system comes into effect, ASIC will be able to remove a business name from the register if trade does not commence within a three month period.
1 This test is not set out clearly - Part 3,
Section 8, Item 1 of the Business Names Registration (Availability
of Names)Determination 2011 provides that a name will be offensive
if, in the opinion of ASIC, it is likely to be offensive to members
of the public or any section of the public.
2 The test to determine if a name is "identical or nearly identical" is set out in Part 2, Division 1 of the Business Names Registration (Availability of Names) Determination 2011. This requires a consideration of Schedule 1 which lists words and expressions taken to be the same. This will apply to two names which are pronounced the same, even if different characters are used.
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.