Mar 16, 2016 What’s the business about Business Names?
There is often a lot of confusion surrounding business name registration. What is it? Do I need to register? Why do I need to register? What does registration give me?
You might be wondering, what’s the difference between registering your company name during ACN registration and registering a business name? You’d be forgiven for assuming the two were almost exactly the same thing. They are not the same though. As of the 28th May 2012, the Australian Securities and Investments Commission’s (ASIC) national business name register has been in operation-designed to provide a way of identifying the entities that are trading under one or more business names.
For comparison, when you register an Australian Company Number (ACN) you are asked to choose a name for your company. You can only trade under this name if you list it exactly as it has been registered, with the ‘Proprietary Limited’ suffix included. If your company is called ‘Daniel’s Deli Pty Ltd’, you cannot trade under just ‘Daniel’s Deli’ - you’ll need the ‘Pty Ltd’ at the end, UNLESS of course, you have this shortened version registered.
To gain some perspective, let’s explore business name registration in more detail.
What is a business name?
A Business name is any name in which a business (operated by either an individual or entity) chooses to operate under. Business names were once referred to as ‘trading names’. In accordance with the Business Names Registration Act 2011, all names for a business that are not identically matched to the sole trader, partnership or company name (in their entirety) must be registered with ASIC.
For a real world example of a company that has multiple business names registered, we can look at the Australian founded company Dick Smith Electronics Pty Limited. This company has numerous business name variations registered with ASIC including: ‘Dick Smith Electronics’, ‘Dick Smith Electronics Powerhouse’, ‘Dick Smith’, ‘Tandy’ and ‘Dick Smith Talk to the Techxperts’.
Using the search tool to check the availability of your proposed business name/s, you are able to register numerous business names with EasyCompanies. Once you have confirmed the availability of your proposed business name/s via the EasyCompanies search tool, you can proceed to register numerous business names via our secure platform.
Can I update a business name?
Unfortunately, once your business name has been registered you cannot ‘update’ or ‘change’ this name. If you accidentally register a business name that has been spelt incorrectly or that you simply don’t like anymore, the course of action you might wish to pursue is cancelling the business name. You are able to action this cancellation online via ASIC connect or by emailing ASIC directly with a request for cancellation.
The benefits of business name registration
The value of business names should not be overlooked. Often times a company’s name may not accurately reflect the actual nature of your business. Perhaps the broad range of services your company offers could not be captured in the one name? On the other hand, maybe your company’s name is far too long and you have a catchy business name that would be more appropriate.
What will I need to register a business name?
In order to register a business name with ASIC, it is important that the individual or company has a registered Australian Business Number (ABN). ABN’s are administered by the Australian Taxation Office (ATO) and are required in order for ASIC to action business name registrations. You are able to register multiple business names under the one ABN. For your convenience, with EasyCompanies you are able to complete your ACN, ABN and business name registrations all in the one, streamlined process!
Should I be writing my company name or business name on documentation?
When running a business, written documentation that is both legal and sales related is frequently distributed and exchanged. If your company trades under a business name, what name should you be listing on these kinds of documents?
This is a particularly important consideration when it comes to entering into contracts. In accordance with Section 148 of the Corporations Act 2001, it is essential that the complete company name, including the ‘Proprietary Limited’ suffix is included on all business related documentation. The ‘Pty Ltd’ suffix is the legal element of your company’s name. If the company’s name is not listed in its entirety, whomever signed off on the written communication is inadvertently exposing themselves to personal liability claims. With one of the key features of a proprietary limited company being that any potential liability is limited to the funds of the company, to leave oneself at risk - for example, by forgetting to add a suffix or only listing the business name of the company would be most unfortunate.
For those companies trading under an alternative business name, you are able to list both your business and company name. By playing around with the font size to emphasise one name over the other, your trading name can still steal the spotlight of your letterhead and business card without the risk of a company or individual seizing your personal assets if you were to forgo your company’s name and be caught out for this a courtroom environment .
Do I own my business name once it’s registered?
In short, no. Business name registration is not to be confused with registering a trademark. You are granted exclusive rights to the use of a trade mark once registered.While registering a business name is an essential, legal requirement, this does not mean you are granted exclusive ownership or rights to this name. This is important to remember for those who might be intending to use an existing business name as the basis of their company name. If someone in another state has registered this name successfully prior to May 2012, ASIC will not allow you to use this as your company name.
If you want to own a business name, you will need to register this name as a trade mark. In order to register a trademark, you will need to action this through Intellectual Property Australia. For more information regarding the regulatory requirements of maintaing your business name and an effective remedy for anyone suffering insomnia, please see ASIC’s Regulatory Guide 235 - http://download.asic.gov.au/media/1247075/rg235.pdf
How do I maintain this business name?
Companies need constant maintenance. Keeping an eye on your business name registration’s expiry date is always a good idea if you’re to avoid losing it to a third party wanting that name. You might be surprised how in demand some names actually are. Business names are renewable every 1 or 3 years as elected by the applicant. It is also important that your business name’s details remain up to date with ASIC. Individuals who have registered a business name are encouraged to action these requirements online, via ASIC’s online ‘connect’ portal.
The ramifications of trading under an unregistered business name:
If you have Intellectual Property (IP) rights that you are wishing to enforce, you are able to lodge a complaint with IP Australia and this complaint will be investigated. There are ramifications for failing to pay annual review fees/trading under a deregistered company and for infringing IP rights.
This being said, IP Australia will not police an individual’s IP rights, and instead advise that this is your responsibility to launch any legal proceedings if you feel your IP rights have been infringed. The type of infringement or complaint that an individual may make will depend on the type of IP rights that are affected. The legislation applicable to this will dictate the nature of the complaint one might be entitled to make.
So now that you’re an expert on business name registration- the real challenge of actually thinking of a good business name or two awaits you! Should you decide to register a business name, EasyCompanies offers both 1 year and 3 year registration with the added benefit of renewal alerts to remind you when your business name/s may be nearing their expiry date. To see whether your business name is available now, visit our Business Name Search
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