A new national business name registration system is being developed to replace the existing framework which requires business names to be registered separately in every state or territory where a business operates. The current system involves different agencies, processes and fees across the different states and territories.
An exposure draft of the Business Name Registration Bill was released on 28 May 2010 for public consultation, which closed on 28 August 2010. The regime was intended to come into effect in April 2011, but the bill is now being re-drafted and will need to go back to the states and territories for further approval. No revised timetable for implementation is available, but updates will be published on the website of the Department of Innovation, Industry, Science and Research as information becomes available: www.innovation.gov.au/SmallBusiness/Support/Pages/ABNBusinessNamesRegistrationProject.aspx
The New Regime:
Key features of the current proposal are:
- centralised administration: the new national, online system will be administered by the Australian Securities & Investments Commission (ASIC);
- immediate registration: in most cases the online system will allow for immediate registration of a business name, with lower fees for registration ($30 for one year or $70 for three years);
- ABN required: new business name registrations will require an ABN, which can be applied for at the same time as the business name under the integrated system;
- restrictions: the new system will retain most of the existing restrictions on business name registration (ie offensive or misleading names, names containing restricted words, identical or similar names);
- existing registrations: current business name registrations will automatically transfer across to the new national register. Where identical or similar names are registered by different entities in different states and territories, a geographical suffix or notation will be added on the national register [eg Joe's Plumbing (NSW) and Joe's Plumbing (Qld)]. The business name itself will not include this qualifier. In this situation, businesses could potentially trade in the same state or territory under an identical name;
- franchisees: franchisees will no longer be required to provide a copy of the franchisor's written consent to ASIC to register a franchise business name. This creates a potential risk of businesses 'piggy backing' off the reputation of well known franchises by adding geographical differentiators to a business name. Franchisors will need to monitor the register to ensure only authorised franchisees have registered business names;
- appeal process: if the applicant for a business name application is unhappy with a decision it can lodge an application for review of the decision with ASIC within 28 days of the decision. An entity which faces a real risk of substantial detriment because of the decision to register a business name can lodge an application for review within 15 months of the day of registration. No fee applies for these internal reviews. If dissatisfied with the outcome of the review, a party can appeal to the Administrative Appeals Tribunal.
These features may change under a revised version of the Business Name Registration Bill.