There's now less than a week to go before ASIC launches the new national business names system, supported by ASIC's online service portal, ASIC Connect, and its new search features.
Here are our ten top tips for business owners
- Mind the gap
Fair Trading NSW has said it will be closing its registers today so they can finalise current applications and send a clean data set to ASIC on 25 May, so that the data can be migrated over the weekend to enable launch of the new register on Monday 28 May. If your business name renewal date falls in this period you should by now have received a letter from Fair Trading NSW to let you know that you should wait to receive a further letter from ASIC before taking any steps to renew your registration. In the meantime NSW Fair Trading will not accept or process new business name registrations, renewal or restoration applications after today.
- Check that your data has been migrated
While ASIC is advising that there is nothing existing business names owners need to do, given there have been some teething problems with the new Personal Property Securities Register that commenced on 30 January this year, it would be advisable to check after 28 May that your business names have been migrated successfully.
- ABN is king
To register new names from 28 May on the new National Business Names Register the applicant will need to quote an ABN or at least provide the ABN application number if they are waiting for an ABN to be issued to them. The national register will support registration by trusts and partnerships and other taxpayer (but non-legal) entities, using the ABN as the key that holds it all together. In November ASIC is expecting to launch a joint service with the Australia Business Register (ABR) whereby new businesses will be able to file a joint online application for an ABN and National Business Names registration.
- Use the new search service through ASIC connect and be
prepared for "Computer says no"
The free Check Name Availability search, which will tell you if a name is immediately available, is one type of search that will be offered. There are also a range of search services attracting a fee that can be paid for and the search obtained online, in addition to searches of registers like those of banned and disqualified persons, and Australian Financial Services licensees, that are fee free. Bear in mind that the rules for availability of business names and company names are different, with there being a range of additional rules as to when business names will be considered identical to other business names than applies in relation to company names. It is expected that registration under the new rules will be more difficult then is the case currently, as the flexibility of different applicants being able to register in different states for geographically separate businesses will disappear, and the sophistication of the trade marks register, which allows for identical marks to be registered in different sectors, will not exist in the business names register.
- To let lapse or not to let lapse
If you have a number of identical business names from different jurisdictions that are migrated, don't just automatically let all the registrations that expire first lapse, (although you can of course decide to do this). Yes, you will have to pay separate renewal fees to keep them all going, but at $30 for one year and $70 for three years they are considerably less than the current state fees, and you may have the opportunity or desire to sell or transfer those names in the future in particular geographical jurisdictions. In the meantime, you can keep all the multiple registrations going indefinitely, something which will not be possible with registrations under the new regime. ASIC says you will be able to align all your registration periods if you want to cut down on administration.
- Computer says maybe?
The new system will respond to your new application with a red, green or amber light.....the latter will allow you to discuss the application with a real person before a decision is made, as it will have been rejected because it failed on one of 14 tests for availability. There will also be an amber (transfer) result which will indicate that you will need to provide the consent to transfer number which the transferor should have received from ASIC before your application can be processed. In buy/sell transactions the vendor should have provided this number to the purchaser on settlement. You can also apply for review of a decision to reject a name.
- Get (connected) with the program
The first step to being able to transact with the system will be to sign up to ASIC Connect and obtain an ASIC key. Keys are issued per business name and allow you to link the name to your ASIC Connect account for the purposes of registration, administration and renewal. Keys will be issued with a registration and with a renewal notice, or you can request an ASIC key be issued to you at any time through the website www.asic.gov.au/question. Agents acting for several businesses in managing their business names can, after arranging client authorisation, request a bulk list of ASIC keys for each of their clients which they can then use to link those business names to their individual ASIC Connect accounts, and transact for those clients. More than one agent can transact for one business.
- Where names collide
In short, if there is a tussle over a name, the winner is likely to be the one with the registered trade mark. Remember that the business names registration will not give you rights in the name; you need a trade mark registration for that. Seriously consider applying for trade mark registration if you do not have it already. We've said it before and we'll say it again...business names registration is about compliance, trade mark registration is about name protection.
- Don't panic about renewals (just yet)
ASIC has said they will be phasing in renewals post 28 May so as not to overload the system, so will be staggering their reminder letters, but as mentioned before you should check to see whether all your details have been successfully migrated and that none of your personal information (date and place of birth and residential address) appears on the public registers.
- Look To The Future
The new online services that ASIC is promoting will be further enhanced in coming years – with joint ABR/ASIC registration for new businesses mentioned above to be launched in November this year and features such as online company registration expected to be launched in 2012/2013. In the meantime, ASIC has said they will be relying on feedback from customers and the results of appeals for review in refining the systems around the availability and registration of business names.
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.