Business Services Alert: National Business Names Registration Scheme: Important changes to the registration of business names in Australia - 26 Oct 2011

The National Business Names Registration Scheme, comprised of three Bills to replace Australia's current State and Territory business name schemes, was passed by the Senate on 13 October 2011. The Scheme introduces a new National Business Name Register, to be operated by ASIC, which will enable businesses to register their business name on one national register rather than in every State and Territory in which they trade.

Here, associate Tim Scanlan and solicitor Helen Davison discuss how the National Business Names Registration Scheme will work and what it will mean for businesses across Australia.

Key impacts for Australian businesses

According to the Government's proposal, the new national regime offers a number of advantages:

  • Easy registration: Businesses will be able to apply online to register a business name 24 hours a day, seven days a week, and in most cases will receive confirmation of their registration immediately.
  • Requirement for ABN: All businesses will be required to have an Australian Business Number (ABN) before they can register for a business name. A joint online application for an ABN and business name will be available to help new businesses. This joint application will be useful because registering for an ABN and a business name are the two most common registrations undertaken by new businesses.
  • Reduced costs: According to ASIC, the cost of registration is set to decrease from $255.60 (the current fee to register a business name in Queensland for three years) to $70 for the same period. The registration will cover all States and Territories, so businesses will no longer need to register their business name in multiple States and Territories, which can cost over $1000 in application fees alone depending on how many different jurisdictions a business operates in.
  • Public assess to details: The public will be able to find out the owner of the business name, the entity's principal place of business and its address for service free of charge on ASIC's website. Home-based businesses will only have their suburb shown.

Additional changes to the registration of business names

Before allowing a registration, ASIC will now not only consider whether business names are identical or nearly identical, but also how a business name is written or sounds. An example of where this may apply is provided in the Bill, which states the business name 'Creative@Work' would be considered the same as 'Kre8tive at Work' despite the different spelling, as it sounds the same. As a result, if one of these names was already registered, the other could not be registered. This differs from the current Queensland legislation, which only prohibits business names which look similar to existing business names.

Further, the regime will deem certain words to mean the same thing. For example, the Bill states that a reference to 'accommodation' will also be a reference to 'holiday accommodation' or 'accom'. Accordingly, if a person wanted to register 'ABC Accommodation', they would not be allowed to do so if another party had previously registered 'ABC Holiday Accommodation', due to the similarity of the names. Previously, the owner of the registered business name needed to consider whether there was an infringement of their intellectual property rights and, generally speaking, the Office of Fair Trading would not interfere if the names were sufficiently different.

As is the case in Queensland, undesirable business names will also be prohibited from registration. Undesirable business names are those that are considered offensive or suggest a connection, when one does not exist, between a number of people and bodies, including the Government, the royal family and charitable organisations. There are also some restricted words that cannot be used in business names, including, for example, 'Australian made', 'charity', 'trust' and 'trustee'.

What will happen to current registered business names?

Current business names will automatically transfer from the State and Territory registers to the national register. Current business names will then expire on the original date specified in the State or Territory registers, with the owner of the business name receiving a renewal notice from ASIC.

If you have the same business name registered in different States and Territories, the national register will combine them into a single registration. Further, if an identical business name to your business name exists in a different State or Territory, both names will be issued with a location identifier on the register, and the businesses will be able to continue trading under the same names.

When will these changes take place?

The National Business Names Register is set to be operational by the middle of 2012, provided that each State and Territory passes the appropriate referral legislation. Tasmania and NSW have already passed their referral legislation, and a referral bill is currently before the Queensland Parliament.

For more information about the National Business Names Registration Scheme or its impact on your business, please contact HopgoodGanim's Business Services and Structuring practice.