The Australian Government will be investing $125.2 million over
four years in the Australian Business Number (ABN)
Business Names Registration Project, an initiative designed to
streamline ABN and business name applications.
The consultation period for the Business Name Registration
Bill 2010 (Bill) is due to expire in the next
few days, with the changes expected to commence in April 2011.
The following information has been provided based on the Bill in
its current form. Some changes may be made prior to the Bill
gaining assent.
1. THE CURRENT SYSTEM
Under the current framework, business names in Australia must be
registered separately in every state or territory where the
business operates. Each state and territory has different
processes, procedures and fees for business name registrations.
2. THE NEW SYSTEM
The new system will be administered and maintained by ASIC. The
process for registering a business name will be instantaneous via
an online application system. There will also be a free government
search register to identify identical names before registering and
to allow access to certain details of a business.
Registration of a business name will require a single
application which will then be valid in all states and territories.
There will be a set fee for registrations, being $30.00 for one
year and $70.00 for three years. This represents a significant
reduction in fees, particularly for businesses wishing to trade in
more than one state or territory.
New businesses will be required to obtain an ABN in order to
apply for a business name. Applications for an ABN and a business
name will be available under one integrated system. If a business
registers for an ABN and a business name, the business name will be
listed as 'pending' until an ABN has been issued.
All existing names on all state and territory business name
databases will be transferred onto the national register
automatically. Existing business names will not be required to
apply for an ABN, nor will renewals of existing businesses require
an ABN.
2.1 Existing business names
Under the current registration systems, identical business names
can be registered by different entities trading in different states
and territories. However, under the new system an application for
an identical name will not be able to be registered.
Because all the existing business names will be consolidated
onto the national register, any identical names from different
jurisdictions will be differentiated by a geographical suffix, for
example: Kevin's Plumbing (WA) and Kevin's Plumbing (Vic). However,
the business name itself will not include the geographical
qualifier (ie, both proprietors would be able to trade as Kevin's
Plumbing).
It would be prudent for businesses to ensure their business name
registrations do not lapse before the introduction of the national
register, because they may be unable to re-register the business
name due to identical names being transferred from state systems
onto the national register.
Similarly, if businesses have previously been unsuccessful in
registering a business name in a particular state or territory,
they may wish to register the name in another jurisdiction before
the introduction of the national register. The name would then
automatically be transferred across and be available for them to
use nationally under the new system.
2.2 Names that will not be registered
An online and automated test will be used to determine whether a
particular name can be registered, allowing the process to be
instantaneous and repeatable.
In general, a national business name will be registered unless
the proposed name:
- contains unaccepted characters (eg a foreign language
character)
- contains restricted words that require consent of a particular
body to be used (eg ANZAC)
- is likely to be offensive
- suggests a connection with government (be it local, state,
federal or foreign), government departments, agencies, Royal family
etc, where no such connection exists
- 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 etc), including when:
-
elements of a name are disregarded
(eg the spaces between Out Back Tours and Outback Tours)
-
phonetic spellings are substituted
(eg Outback Tours and Owtback Tours)
-
creative spellings are substituted
(eg Alligator Adventures and Allig8er Adventures)
-
synonyms or word groups are
substituted (eg 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. For example, Anne's
Landscaping and Anne's Landscaping Ringwood.
2.3 Appeals against a rejected business name
application
There will be a 28 day timeframe to seek a review of a refused
business name application. This review is free of charge.
If dissatisfied with the outcome of the review, businesses can
appeal to the Administrative Appeals Tribunal
(AAT). The cost for an appeal to the AAT is
currently $682.00, however the fee is refundable should the
applicant win.
2.4 Franchises
In order to register a franchise, the franchisee will not be
required to provide written permission from the franchisor to ASIC.
As such, there is some concern that businesses will be able to
'piggy back' on well known franchise names by adding geographical
differentiators after a business name.
Franchisors will need to regularly check the ASIC register to
ensure that only authorised franchisees have registered a business
name in the name of the franchise.
2.5 IP and trade marks
Business owners must be aware that simply registering a business
name, though a compulsory undertaking, does not grant them any
intellectual property rights over the use of the name.
Businesses need to register trade marks to acquire exclusive
rights in a name and it is often advised to apply for trade marks
and internet domain names at the time of registering a business
name.
This will become even more important given that the registration
of franchise names will no longer require written permission from
franchisors in order to register a business name.
For more information, please contact:
Nicole Stevens-Warton, Partner
Phone (direct): +61 3 9608 2264
Email:
n.stevens-warton@cornwalls.com.au
or
Ian Sinclair, Partner
Phone (direct): +61 3 9608 2166
Email:
i.sinclair@cornwalls.com.au