New National Business Name System - same exclusivity issue

A new National Business Names Registration System is expected to commence in May 2012 (dependant on legislation being passed through the State parliaments) and will replace the current State and Territory registers.

Once the new system has commenced, all business name registrations will be managed and administered by the Australian Securities and Investments Commission (ASIC). 

The purpose of the new national system is to streamline the business name registration process and to cut away some of the red tape, duplication and cost involved in running a business.

 Under the new national system: 

• businesses will only need to register a business name once - instead of having to register in each State and Territory they operate in;

• existing business name registrations will automatically be transferred over into the new system and onto the new national register;

• businesses will need an ABN, or be in the process of applying for one, in order to apply for a business name;

• businesses which have multiple different business names, or also have a registered company, will be able to align the renewal dates for those registrations;

• where a business has an identical name as another business operating in another State or Territory, a notation will be put on the public register to differentiate those businesses.  It is not yet clear what that notation will be; and

• to register or renew a business name it will cost $30 for one year, or $70 for three years.

Exclusivity issue

Many businesses don’t realise that if they trade under a name other than their “proper name” (ie. if an individual, the individual’s full name, or if a corporation, the corporation’s corporate name) they must register that name as a business name.  The registration of a business name is a statutory requirement, and does not in itself give a business any exclusive rights to the use of that name - only a trade mark can give a business that kind of protection.

The registration of a business name on the new National Business Names Registration System does not change this. 

The new National Business Names Registration System is likely (at least initially) to result in an increased number of disputes about ownership and exclusive use of business names and brands because: 

• following migration of the State and Territory registers to the new national register, there will be many situations where the same business name is registered to more than one business; and

• it will be easier for businesses to register a business name nationally – even though they may only use it in a small geographical area.    

What to do?

With the introduction of the new National Business Names Registration System it will become even more important for a business to ensure they protect their branding and trade marks.

Businesses can minimise the risk of business name and branding disputes by:

• checking, before business name registration, that the proposed business name is not already registered as a trade mark; and

• registering their business name and brands as a trade mark – before someone else does.

Author: Michael Cossetto