Business notes – protecting your business name

 

Your business name can be one of your most valuable assets. But there are also some complexities and traps involved in what you call your business. You can’t just trade under any name and there are steps you can take to protect your chosen name.

Do you need to register a business name?

If you want to use a particular name for your business, you must register the  name with ASIC, unless one of these exceptions applies:

You are a sole trader and your business name is your name without additional words. For example, “Rhys Bower” is ok, but not “Rhys Bower’s Flowers”. Likewise, “Nicholas Wood” is fine, but not “Nick Wood’s Goods”

You trade as a company and you use the company name as the business name. For example, Bower Wood Pty Ltd is fine, but you couldn’t trade as Bower Wood Lawyers without registering that name.*

You trade as a partnership and your business name is all the partners’ names. For example, “Rhys Bower and Nicholas Wood” is fine. “Rhys and Nick’s Bricks” (that’s the name of our our upcoming Lego shop**) needs a registered business name.

It is an offence to carry on a business under a name unless one of these exceptions apply. The penalty is a $6,300 fine.

Registering a business name

Assuming an exception does not apply, you need to register your name. You do that with the Australian Securities and Investments Commission (ASIC) or with the Australian Business Register.

You will need an ABN to register a business name. There are a range of dishonesty related convictions that will disqualify you from registering a business name.

You can’t use any old name. You won’t be able to use a name that:

  • is identical or nearly identical to a name that is already registered as a business name or a company name
  • is already the subject of another application
  • is offensive (use your imagination)
  • includes restricted words like Commonwealth or Federal

Registration currently costs $36 for 1 year and $84 for 3 years. You need to renew your registration before it expires to keep using your business name.

Obligations once you register a business name

Registering a business name carries some obligations:

  • All your written business communication must clearly include the business name. Accounts, receipts, orders and offers to provide goods and services must also include the ABN
  • Your business name must be prominently displayed at the your place of business

What registering a business name doesn’t do

Registering a name for your business does not affect anyone else’s rights in relation to the name. You don’t have any rights to stop someone else using your name. To get those rights, you need to register a trademark. A trademark legally protects your business name – you get exclusive use of the name across Australia.

Trademark applications are much more complex and expensive than registering a business name. It also takes a lot longer.

We offer business and commercial law services – Contact us for more information

 

*you can’t anyway – that’s our name.

**just kidding.