Two Things You Need to Know About Your Business Name
This article is about one misconception and one new change affecting business owners.
First, the misconception….
We’ve noticed that the difference between registered business names and registered trademarks is often misunderstood by business owners.
The first myth to clarify is that registering your business name is not designed to protect the business owner. It’s designed to protect consumers.
A registered business name does not help to protect your brand identity from imitators.
For that protection, you need a registered trade mark.
Registering a business name does not in itself give you any exclusive rights over the use of that name. For example, a competitor can successfully register a business name that is very similar to your business name.
What the registered business name does is identify the business owners, should someone wish to look up who is behind a business.
When setting up your business, if you choose to operate as a sole trader, partnership or a trust, and not as a company, then you have to register your business name unless your business name includes your, or your partner’s, first name and surname.
As you can see by that last exception regarding your or your partner’s name, a business name is simply about identifying the business owner.
Whilst registering a business name is necessary in many cases, a trade mark is valuable to any business because it gives you the exclusive right in Australia to establish a brand identity and legally stop imitators.
Once registered, the trade mark is protected in all Australian states and territories for an initial period of 10 years. For international protection, you need to register your trade mark in each country you want protection in.
So that’s the misconception: Don’t think that your registered business name protects you. It doesn’t. Get a registered trade mark for that.
Now, onto the change…
New national Business Names Register
A new business names register has begun on 28 May 2012, dependent on the passage of legislation through the state and territory parliaments. It will be controlled by ASIC.
You can register, maintain and search business names online with ASIC.
The national register will replace the current system that requires businesses to register their business names separately in each state or territory in which they wish to operate. This will remove much inconvenience and cost.
ASIC’s public register will allow a business to be identified and then easily contacted using publicly accessible information on ASIC’s website.
The online Business Names Register will allow you to:
- quickly determine if a business name is available;
- register and renew a business name; and
- make changes to details relating to your business name.
So what do you need to do?
If a business name was (or is) registered prior to 28 May 2012, your business name will be automatically transferred to the Business Names Register on 28 May 2012.
However, if your Business Name was due for renewal on 29 May 2012 or shortly after, ASIC may send the renewal notice up to 2-3 months after the registration expiry date. ASIC will not cancel a business name until after the extended due date that will be provided on the renewal notice.
Overall, one national Business Names Register is a good thing, but there might be some initial teething issues with combining all the state and territory registers.
For example, if your business name is already registered in more than one state or territory, all your business names will transfer to the ASIC business names register on commencement. You can then choose to keep one business name record (e.g. the business name with the latest registration expiry date) and cancel the remaining business name registrations. There is no fee to cancel a business name.
This will simplify renewals and record keeping for you, and will minimise the potential for confusion from consumers in determining the business name holder’s correct details.
If two or more identical (or nearly identical) business names were previously registered in different states or territories to different entities, ASIC will provide additional information on the public register to help the public differentiate the different businesses, such as the state or territory in which the business name was first registered. This additional information does not form part of the business name, but is used to allow people to distinguish between identical business names on the public register.
Another benefit to having a national business name register is the cost of renewal is now significantly cheaper! The renewal cost of a Business Name is $30 for 1 year, or $70 for 3 years.
It’s vital to consider which entity within your business structure should hold (own) your trademarks. If that last sentence doesn’t mean much to you, we need to talk about your business structuring for reducing your risk. Do not apply for any trade marks before speaking with us, so we can advise you regarding this.
We’re about so much more than doing your tax and compliance work, and we love opportunities to guide our entrepreneurial clients in managing their businesses, building their wealth, and just as importantly, protecting it.
If you have any questions about the new ASIC Business Names Register, or you’d like to be pointed in the right direction re applying for a registered trade mark for your business name (and/or logo), please contact your accountant at Leader Accountancy and let us know.