A person must register a business name if they carry on a business or trade within Australia and are not trading under their own entity name. The main purpose of business name registration is to allow customers to identify the person(s) or company behind a business (trading) name. Under current law, business names are registered in each State or Territory in which a business trades.
The new national system for business name registration is an initiative which forms part of the reform agenda of the Council of Australian Governments (COAG), and will give the Australian Securities and Investment Commission (ASIC) national responsibility for registering, renewing and administering business names for all Australian businesses. It is expected that the new national system for business name registration will commence in April 2011.
An exposure draft of the Business Name Registration Bill was released for public consultation on 28 May 2010. Some of the key points are discussed below.
Business names which are currently registered under the State/Territory laws will be automatically rolled into the new national system.
The transfer of all business name registrations to the national business register will include some identical business names that have been registered (by different owners) in different jurisdictions. These identical business names will be distinguished on the register by a geographical suffix or qualifier e.g. (SA). The business name itself will not include the identifier or suffix.
The renewal of existing business names originally registered in the State or Territories will still fall due for renewal on their original expiry date.
Australian Business Number (ABN)
A new business will need to have an ABN, or be in the process of applying for an ABN, in order to register a business name. The proposed new system will enable businesses to register a national business name and an ABN in a single online registration process. A paper-based form will also be available which can be mailed to the Registrar, ASIC. If a business has applied for an ABN, and their application has not been refused but no ABN is yet received, the name will not be able to be registered by someone else.
The public will be able to access certain contact details about a business name holder on an online business names register. It will be free to search online for information such as business contact details, principle place of business and ownership of any business name presently registered in Australia. Further information will be available for a proposed fee of $20.00 from ASIC (this will include business addresses for home-based businesses). A business will be able to seek a suppression of details on request to ASIC.
Business Names Available for Registration
An online test is to be used under the new national system to determine whether a particular name can be registered. In general a national business name will be registered unless:
- the name contains unaccepted characters (e.g. a foreign language character);
- the name contains restricted words which require consent of a particular body to be used (e.g. ANZAC);
- the name is likely to be offensive;
- the name is identical, or nearly identical to, an already registered company or business name or a name on the National Names
Index (which holds names of cooperatives, associations, limited partnerships) including when:
- certain elements of a name are disregarded (e.g. the spaces between Out Back Tours and Outback Tours);
- phonetic spellings are substituted (e.g. Outback Tours and Owtback Tours);
- creative spellings are substituted (e.g. Alligator Adventures and Allig8er Adventures);
- synonyms or word groups are substituted (e.g. restaurant and café may be regarded as equivalent)
The test will allow the registration of a business name that differs only by a location regardless of whether or not there is a relationship between the businesses, e.g. Smith’s Nursery and Smith’s Nursery Blackwood.
It is proposed that the fee for registering a new business name will be $30.00 for a one year registration period and $70.00 for a three year registration period. The renewal fee will be the same as the registration fee under the national business name registration system.
A business dissatisfied with the rejection of its business name application will have 28 days to seek a review by ASIC. There is no fee for the review. If a business remains dissatisfied with the outcome of the review, the business can appeal to the Administrative.