A reduction in Red Tape – Business Name Registration Changes

Business name registration is a necessary evil if you operate in Australia as a business under anything than a personal or company name. If you trade as a trust, a partnership, or just want to operate under another name, then you must register a business name.

The idea of the system is to ensure that customers, suppliers and the public at large can identify the entities which are trading. It is important to understand that registering a business name does not create any rights in the name registered – for that, you would need to register a trade mark with IP Australia. The process is fairly simple in most cases, and the fees (while never welcome) are not excessive.

The big problem arises when a business wants to operate in several locations within Australia. Each state and territory has a separate system. In most cases, you are also required to have a local business address specified. In the era of internet based sales, it is not always easy to tell if you are trading in a particular state or territory. What is a reasonable system for one state becomes an messy and expensive exercise when you are required to register in six states and two territories.

Another complication is that the system currently operates independently of the Australian Business Number (ABN)
system, which is required for tax, GST and related purposes.

Following from a decision at COAG (Council of Australian Governments, including Federal, State and Territories), a bill has been introduced into the Federal Parliament to create a single national business name system. States will refer their powers to the Commonwealth, and ASIC will operate a single, on-line system. Existing names will be
grandfathered, with provisions to deal with the co-existence of (e.g.) ‘Beachside Fish & Chips’ in multiple states.

Also, the system will require that an ABN be provided for each registration, so that the business name and ABN systems are aligned.

It will take all the states to pass their corresponding legislation before the new scheme is in operation, so it is
likely to be a year or two away. The outcome should be a much more efficient, on-line, one stop national business name system, which will simplify requirements for anyone in or starting a new business.

by Peter Franke

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