23 Feb Why Register Your Business Name?
Why Register Your Business Name?
This is a question that regularly causes confusion so I will try and simplify the answer below.
The Purpose of a Registered Business Name
“Registering your business name simply means nobody else can trade with that business name – It does not give you any Trademark or Copyrights”
This is important to understand because there are many business names you could register that could infringe current registered Trademarks. Let me use the following Burger King example to demonstrate my point:
A search of the ASIC Business Name register shows the business name “Burger King” was registered by James Bernard O’Kane of Western Australia on 20 April 2017.
While I am no Intellectual Property lawyer, I suggest the Burger King Corporation, which registered a Trademark on the words “Burger King” in December 1996 (TM ref 72389) may have an issue with this business name.
The issue to understand from this, is that ASIC will register a business name provided the name fits within their determination rules (refer Business Names Registration (Availability of Names) Determination 2015).
Those rules do not refer to any Intellectual Property searches and only require ASIC to consider whether the name:
- is already registered,
- is identical or nearly identical to a name already registered to another entity, and
- includes words or phrases that are restricted, offensive or could imply a connection to a government or similar organisation.
Ironically, an older urban myth demonstrates a case where rights were conferred upon the owner of the name Burger King. The myth says, a takeaway shop owner in Adelaide traded under the name Burger King for years when the US corporate decided to expand into Australia. The Aussie battler upheld his name rights and forced the US corporation to enter the market as Hungry Jacks.
The truth of this often-misquoted story, is the Aussie Battler had actually trademarked the name and it was that trademark protection that forced Burger King to change its moniker in Australia. Still, he may have had grounds to argue his case even without the Trademark because his business name was registered prior to Bruger Kings arrival.
So Why Then Do You Need to Register your Business Name?
There are two reasons to consider registering your business name:
- It will generally prevent anybody else trading with that name; and
- The name may create value for your business.
We have also come across situations where banks require business names to be registered and owned by the entity trading a businesses. This is an uncommon situation and is generally the result of an overzealous bank employee not properly understanding the issues. Still, there seems little way around their pedantry.
What if You Have a Pty Ltd Company?
Company names are controlled by ASIC and are unique.
For this reason, if you have a Pty Ltd company then you automatically have the right to trade a business with the same name as the company. So, a company called “Money Makers Pty Ltd” will allow the business to trade as “Money Makers” without paying for an additional business name registration.
Therefore, if you are planning to trade as a company think about naming your company the same as your business name and save the name registration fee.
What about a Trust?
Many businesses trade through a trust structure. Unlike companys, trust names are not unique meaning you can call your trust pretty much anything you want. Importantly, naming your trust the “Money Maker trust” will not give you any business name rights so you may need to consider naming your trustee company “Money Maker Pty Ltd” or registering the business name Money Maker.
How do You Register a Business Name?
Registering a business name is done through the ASIC website. CLICK HERE for a link to the Name Registration page.
As at the date of this post, the fee to register a business name is $34 for a single year. There is also an option to register your name for 3 years for $80.
Where to From Here?
Starting a business can be complicated and getting the key decisions like your business name wrong can be an expensive error to correct.
For more information give me a call in the office on (07) 5448 9600 or drop me a message at firstname.lastname@example.org.