In response to a proposal by the Council of Australian Governments, the States and Territories agreed to refer their business names registration powers to the Commonwealth. As part of implementing the referral, exposure drafts of the legislation were released on 14 March 2011 for 10 days of public comment.
Under the new system, names will be registered as a 'national business name'.
How does the current system work?
Under the current system for registering business names, businesses owners who do not trade under their own name or under a company name must register a business name in each State or Territory in which that business operates. There is a different regulatory authority in each State or Territory. Also application procedures and fees can vary from State to State/Territory and businesses need to ensure they comply with all relevant requirements.
Who will manage the proposed national system?
The Australian Securities and Investments Commission (ASIC) will manage and administer the new national system.
Will any registrations continue to be managed by the States and Territories?
Yes, the States and Territories will continue to register limited partnerships and limited associations, in addition to occupational licenses for professions which include travel agents, estate agents and motor car traders. These licences are currently available in Victoria for example, through Business Licensing Victoria.
When will the national system commence?
The new system will commence in the first half of 2012 — as long as the Commonwealth, States and Territories pass the necessary legislation by then.
What are the transitional arrangements?
Before the national system starts, the States and Territories will finalise applications that they are currently processing and any outstanding business name reviews and appeals.
Then business names currently registered in the States and Territories will be transferred to the new national system.
If there are businesses with identical registered business names in different States and Territories, then ASIC may write to each of them and ask that they add a distinguishing word or expression to their name on the Business Names Register — for example, a geographical identifier such as, 'VIC', 'WA', 'Cooma', or 'FNQ'.
This distinguishing word or expression will not form part of the business name but will help people to distinguish the business names.
Once the new national system is in place, ASIC will handle all business name registration matters.
How will people apply to register a business name under the new system?
Through the proposed application process, people will be able to register a national business name online at the same time as they apply for an Australian Business Number (ABN). They will do so at www.abr.gov.au.
Remember, for a new business to register a business name, it needs to have an ABN, or be in the process of applying for an ABN.
If the business already has an ABN and only wishes to register a national business name, then it will be able to do so separately online at www.asic.gov.au.
A paper form will be available for anyone who does not have access to, or does not wish to use the online system. The paper form can be mailed to ASIC.
What is the process for business name renewals?
Existing business names that were originally registered in the States or Territories will be due for renewal on their original expiry date.
New registrations will be able to select either a one year, or three year, registration period. They will be able to choose to match the renewal dates with other business names they have registered.
ASIC will issue business name renewal notices before a renewal is due.
Can businesses appeal against a decision of ASIC?
An appeal process will be available for businesses to challenge a decision of ASIC about a business name registration. The appeals will be handled through the Administrative Appeals Tribunal (AAT). The AAT may review certain decisions by ASIC which include:
- decisions where ASIC has refused to allow a business to register a business name that is considered undesirable; or
- a determination that an expression related to a business can only be used if certain condition/s are met.
Where will business names be able to be searched?
Basic information attached to a business name will be accessible online for free at www.asic.gov.au. This includes:
- Name of entity behind the business name;
- Principal place of business; and
- Address for service.
Businesses will be able to seek suppression of any otherwise publicly available details on request to ASIC.
What fees are payable?
Businesses will pay a lower fee to register business names — in some cases significantly lower. Currently, business names fees in certain States can be as high as $248.20 or $156.00 for three years.
The proposed fees for registering a new business name are:
- $30 for a one year registration period; and
- $70 for a three year registration period.
Registering for an ABN will remain free.
Who will be able to register a business name on behalf of a business?
The following will be able to register a business name through the online system:
- A person legally responsible for the business, or their nominated and suitably qualified business advisor — for example, their accountant or solicitor; and
- ASIC Registered Agents on behalf of a client.
Members of partnerships or unincorporated associations can nominate a principal contact who will be permitted to act on their behalf in communications with ASIC. Accordingly, this authorised person will be permitted to register business names on their behalf.
Further information can be obtained through a fee based business name search with ASIC.
More information from Maddocks
For more information, contact Maddocks on (03) 9288 0555 and ask for a member of the Maddocks Commercial Team.