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There’s been a change in the wind for a while now, regarding the registration of trading names.
You may have been trading as a business under a trading name for years and been unaware or putting off the fact that you now need to register your business name with the Australian Securities and Investments Commission (ASIC).
New Rules For Registering A Business Name
Before May 28 2012, you could trade under a trading name and the Australian Business Registry collected information from each state or territory. However, it was determined that it made more sense for all Australian businesses to register their trading names in one national registry. To signify the distinction, registering with ASIC gives you a ‘business name’ (no longer a ‘trading name’).
The Australian Business Register (ABR) no longer updates the list of trading names and, although your trading name will still appear in ABN Lookup, it will not do so for much longer.
By November 2023, all trading businesses need to have registered with ASIC. You need an Australian Business Number (ABN) to do that. An ABN is issued by the Tax Department (we’ll cover this in more detail later).
Why Do I Need to Register My Business?
It’s important that no one else takes your business name. The primary reason to register your business name is to be identified, to market and promote your business and attract customers.
You do need an ABN to register a business name. Having an ABN also has a number of other benefits:
- GST – it’s compulsory for businesses with a Goods and Services Tax (GST) turnover of $75,000 or more to have an ABN and to be registered for GST.
- Pay As You Go (PAYG) – it also helps you to avoid PAYG tax on payments you receive.
- Invoices – to issue a tax invoice you must have an ABN. Without an ABN, other businesses may withhold 47% from payments they make to you for tax purposes. This is to discourage cash payments made to dodge tax obligations (there are some exceptions here so you may need to seek professional advice).
- Domain name – you need an ABN to get a domain name.
- Identification – an ABN is a great way to identify your business, with its own unique number.
- Records – if you already have an ABN, when you register a trading name as a business with ASIC, it will also be displayed against the associated ABN record on ABN Lookup.
- Inexpensive – it costs just $37 a year to register a business name with ASIC. There is no fee for applying for or reactivating an ABN.
Do I Have To Register A Business Name If I’m A Sole Trader?
There are circumstances under which you don’t need to register your business with ASIC, such as where you operate your business under your own name. If Sally Smith is the name of Sally Smith’s business venture, then she doesn’t need to register it as a business name.
Even if it’s a partnership, if the name under which the business operates is the name of the partners, then it doesn’t have to be registered.
If the business is registered as a proprietary limited company, such as Sally Smith Pty Ltd with ASIC, it can operate under that legal name. The benefits still apply though, so make sure you do your research and seek relevant advice.
What If I Don’t Want To Use My Old Trading Name?
No problem! You just need to register your new business name and it will attach to your ABN. The old trading name will no longer be attached.
You can contact the ABR to remove the old name associated with your ABN, but even if you do nothing, your old trading name will be removed in November 2023.
How Can I Register My Business Name?
Firstly, you’ll need to do a search to check if your name is available. As mentioned, there can only be one of each business name registered.
Once you’ve decided on a name, it’s an easy process to register it and there’s plenty of help available. ASIC provides its own easy step-by-step guide on how to go about registering your business name.
If you need to apply for an ABN first, then there are several websites that walk you through it, like the ABR itself.
How Can I Protect My Business Name?
Although it’s true that nobody else can register your exact same name, that doesn’t mean your name is protected. A slight difference can allow a name very similar to yours to be registered by another party.
Also, somebody might have already registered the trademark to your business name, which could result in a trademark infringement and be very costly.
You should also probably check if someone has taken the domain name already. You can do this through any of the many domain hosting sites, like Wix or Godaddy. It wouldn’t be ideal to register a business name only to find the domain name has already been taken.
You might even consider protecting your business name further by applying for a trademark yourself – you can check all this with IP Australia.
It pays off to do some homework first and we can help you with some background information about trademarks.
What’s Next?
Don’t forget that deadline – 31st October 2023. Make sure you act in plenty of time and register your business name. It may seem like a daunting administrative task but it’s truly easier than it sounds.
You might want to read through our article about whether registering a trademark is also advisable. It may provide additional protection for your business.
We also offer some great tips on starting your own business from scratch.
Our specialist team of lawyers can help you with our online guide to all aspects of setting up a business. Reach out to our team on 1800 730 617 or email us at team@sprintlaw.com.au. We are here to help!
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