Business Name Essentials
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Written by
Sarah Stoddart
- and posted in Dental, Medical, Pharmacy, Physio, Small Business
The name of a business is important. It is often how the business is known and is an asset the owner usually wants to protect.
In every state and territory of Australia, there is business name legislation, which governs the use and registration of business names. And if you register a business name in your State or Territory, you are required by law to actually be trading under that business name. This means you can’t have an idea for a name and register multiple versions of that name in an effort to try and protect it. If you register a name, you need to trade under it.
The act of registering and maintaining a business name is done through the Australian Securities and Investments Commission. It is a straightforward process that you can do yourself or via your representative. Once a name is registered, it needs to be renewed either every year or every 3 years. Some business owners who own via a company prefer to align the renewal of their business name with the renewal of their company documents.
Transfer of business name
When an owner is selling or transferring an interest in their business, and the name is not protected by third party documents (such as franchise agreement preventing the transfer of the name without consent), the seller is likely to be contractually required to transfer the business name to the buyer on settlement. The transfer process can also be undertaken online and results in ASIC issuing a letter with a “consent to transfer number”. The buyer will require a copy of the letter at settlement to initiate the transfer of the business name post settlement.
Once a seller has requested the transfer of a business name, the buyer has 4 months to attend to the transfer. Therefore, it is important that a buyer attend to the transfer of a business name promptly after settlement to avoid the name being cancelled and potentially taken by another party. This is particularly so where the seller requested the transfer number early in the transaction and time has already been “ticking”. Buyers can get an indication of when the transfer was requested, and when the 4 month transfer period commenced, by looking at the date on the consent to transfer number letter.
Business name tips
Regardless of whether you are registering, maintaining, renewing or transferring a business name, there are a few key things to know about your business name:
Before attending to either a transfer request or completion of registration of a business name, it is very important to check the email address associated with the business name. ASIC issues all correspondence relating to business names via email. If the email address is incorrect, it can be difficult to track down the letter and resolving the issue often requires long periods of time on the phone to ASIC and verification of your identity.
You cannot register a business name that is similar to another registered business name or that contains certain words, such as “bank”. Therefore, before deciding on a trading name, it is important to check that the name is available.
Business name registrations may block company name registrations. Therefore, if you have a registered business name and decide to register a company in the same or similar name, you may experience difficulties. Consider your timing and order of registration carefully.
A business name is not a trademark nor does it prevent a third party from registering a trademark using the same words as in the business name. If you want to register a trademark or protect your intellectual property, seek specialist advice.
If you have any questions regarding business names, please contact Vitality Law Australia on (07) 2112 0747 or hello@vitalitylawaustralia.com.
This article is intended to be for general information only. It does not constitute legal advice nor does it establish a relationship of client and lawyer. Specific circumstances or changes in law may vary the accuracy or applicability of the information published. We recommend seeking specific legal advice particular to your circumstances before taking any action, or refraining from taking any action, on any issue dealt with in this article.