The new proposal to the business name registration system is likely to reform the registration of state based business entities.  The system is proposed to start in April 2011. Presently, every business name has to be registered in each state or territory in which that particular business operates. However, with the new proposal, the states have agreed to submit their business name registration powers to the National Government.

The goal behind the new reform is to have a uniform registration process for business names as well as ABNs, lessening the trouble on different business dealers. Moreover, the current system has different fee arrangements. Also, the registration periods are different for each state the business operates in. The proposed reform replaces the current fragmented system and hopes to provide a standardized registration system for businesses regardless of the different states the businesses operate within.

Key Characteristics

The new system is likely to have the following features:

1. Business or company names shall be registered nationally, unlike in each state where a business trades in;
2. Business names presently registered under the state business names shall be automatically rolled over into the new proposed federal system;
3. Businesses will only need to register their names once and not have to submit multiple applications for each state they hold their affairs in;
4. ASIC will be responsible for the registration and will be supported by ABR and IP Australia;
5. Businesses will be able to apply online and receive immediate confirmation of registration; and
6. Businesses will need to have an ABN for registering a new business name, but can register for a name at the same time as ABN registration.

Fees

Under the present system, the registration fee and time period varies with each state. The proposed system has a uniform fee for registering or renewing a business name -. businesses will have a choice of registration either for a one or three year period. The fee for registering and renewing the business name is the same i.e., $30 for 1 year and $70 for 3 years.

Currently, different companies with the same name can be registered in their respective trading states. When the proposed national system comes into place, to avoid duplicity, a suffix indicating the state in which the business trades will be added to each business name and such a business can also operate in any state of its choice.

The road ahead

The government will facilitate an online test whereby businesses can assess the likelihood of registrable names. This means that if a name is similar to a registered business or company name, misleading or offensive, it will be denied registration.  

Trademark searches will also be permitted during the application stage. However, the onus will still remain with the proprietor to ensure that any IP violation does not occur. Registration of a company name alone does not give the owner protection in terms of trademarks.

Franchisees will also need to register their desired franchise name in order to trade. However, the franchisee, under the proposed new system, will not need to submit a written consent to ASIC from the franchisor, although they must ensure they have to prove they can use the trade name.