New streamlined and cheaper National Business Names Registration Service
In Australia, a Register of Business Names is currently maintained in each state and territory of the Commonwealth, and persons carrying on business under a particular name are required to register their business name in each jurisdiction where they are trading under the name.
While many business names are registered for use by individuals to identify their business, when a company is carrying on business under a trading name that differs from its company name, it also needs to be registered.
Unlike trademark registrations, business name registrations grant no proprietary or enforceable rights in the name registered. However, many individuals are confused about this and think that the registration of a business name gives them a right to use the name.
The new national business name registration service will not resolve this confusion entirely, but should simplify the current system. Hopefully, this will lead to greater consistency in the assessment of business name applications and greater understanding of the differences between trademark and business name registrations.
The new National Business Names Registration Service (National Register) begins in Australia on May 28 2012, subject to all states and territories passing the required legislation. Under the new scheme, businesses will have to register their business name only once on the National Register instead of separately in each state or territory in which they trade. It offers a streamlined and cheaper option for Australian businesses and will make it easier for the general public to check details of businesses with whom they deal.
The Australian Securities and Investments Commission (ASIC) will administer the National Register, which will offer an online application system, an automated business name availability test and lower application and renewal fees.
Existing business name registrations will be automatically transferred to the National Register. If the same business name is registered in more than one state or territory, the owner can choose to cancel all but one of the registrations. There is also a facility for ASIC to consolidate multiple business name registrations into one entry and to notify the owner of this.
If the owner chooses to maintain multiple registrations for the same business name, it must nominate one principal place of business. Where existing identical business names are registered by different owners and transferred to the National Register, ASIC will add a geographical (or other) identifier to differentiate the respective businesses. This additional identifier will not form part of the business name and the owner can choose a different identifier to use if it is available.
One advantage is that the new system is substantially cheaper. A business currently operating in each state and territory may pay fees in excess of A$1,000 for three years registration. Under the new scheme, businesses will have the option of registering their business name at a cost of A$30 for one year or A$70 for three years.
The new system is also more transparent and accessible to consumers. Whereas consumers presently have to pay to obtain business names extracts to be able to identify the person(s) or entity behind a business, it will now be possible to search the National Register free of charge for contact and ownership details.
However, some elements remain unchanged:
- If a person or company is carrying on a business within Australia under a name that is not identical to their personal name or the name of a company or other entity, they must register that name as a business name.
- An application to register a new business name will be refused it if is identical, or nearly identical, to an existing business or company name.
- A business name registration (like a company or domain name registration) does not give the holder any proprietary rights in that name or the exclusive right to use that name. Such rights can be obtained only through the trademark registration system.
While the new online application service includes links to Australian trademarks and domain name searches, it remains important for individuals and companies to ensure the use of their proposed business name does not contravene the existing trademark rights of others.
Foreign trademark owners should have their Australian advisers check the Register of Business Names when checking the availability of a trademark because, even though a business name registration does not itself grant enforceable rights, it may be indicative of existing common law rights.
Gerard Skelly, Kathy Mytton and Sean McManis, Shelston IP, Sydney
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