Paul Anderson | May 2012 | Corporate and Commercial
The National Business Names Register has been proclaimed to commence on 28 May 2012.
Who does this impact? All proprietors of business names and their advisers.
What action should be taken? Existing registrations will automatically be transferred electronically from existing state registers to the new national register conducted by ASIC. It will be necessary to contact ASIC in relation to all future registrations, renewals, cancellations etc.
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National Business Names Register
Two important dates have been proclaimed in relation to the National Business Names Registration System, which is to take effect pursuant to the Business Names Registration Act 2011 and the Business Names Registration (Transitional and Consequential Provisions) Act 2011. Firstly, 20 April 2012 has been announced as the date from which existing registrations held in state and territory registers will be transferred electronically to ASIC to be entered in the new Business Names Register (“BNR�). Secondly, 28 May 2012 has been announced as the date from which the substantive provisions of the Act will commence to operate.
Present System Registration of business names is currently the subject of legislation in each state and territory. This has various inconvenient consequences, namely: >> An entity conducting a national business must separately register in each state or territory register. This is both time consuming and expensive. >> The registrations may have different expiry dates which adds to the administrative inconvenience. >> Even greater inconvenience results if, inexplicably, registration is regected in one state or territory but accepted in all the others.
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This situation needs to be contrasted with the registration of companies which is effective on an Australia wide basis pursuant to the Corporations Act 2001. The case for one national system is clear and to be welcomed. However, the proposal for the transfer was first announced by the Council of Australian Governments on 3 July 2008 and has taken almost four years to implement. The balance of this paper will look at the relevant features of registration in the new BNR.
Objects of the Act Under Section 16, the objects are: >> to ensure that if an entity carries on a business under a business name, those who engage or propose to engage with that business can identify the entity and how the entity can be contacted; >> to avoid confusion by ensuring that business names that are identical or nearly identical are not registered; and
Registration
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National Business Names Register Paul Anderson | May 2012
Under Section 18(1), it is an offence for an entity to carry on a business under a name which is not registered in the BNR. The offence is one of strict liability carrying a fine of thirty penalty units. Exceptions to subsection (1) include if: >> the entity is an individual and the name is the individual’s name; or
>> the entity is a corporation and the name is the corporation’s name. By way of illustration, the name “Paul Smith, Dentist” does not require registration but “Smiths Dentists” does. The BNR is available for search on the internet or otherwise by the public under Section 61.
Written communications Under Section 19(1), an entity also commits an offence if: >> it carries on business under a business name;
>> to ensure that business names that are unavailable, eg offensive, or should be restricted for any other reason, eg that they might mislead consumers, are not registered.
>> the entity communicates in writing with another entity;
There is a misconception in the community that registration of a business name confers property rights in the name. This has never been the case and Section 17(2) makes it clear that a registering entity does not acquire property in the business name.
>> the entity does not include clearly legible “business names information” in the document.
If the entity wishes to acquire property rights, the entity must register a trade mark under the Trade Marks Act 1995. Section 51(1) of the Business Names Registration Act 2011 is in the following terms: “To avoid doubt, the relief the Court may grant in an action for an infringement of a registered trade mark includes an order that the registration of a business name to an entity must be cancelled.”
>> the communication is a “business document”; and
Under Section 19(2), “business names information” means the business name and the entity’s ABN, if it has one. “Business document” means: (a) A document that is lodged with ASIC; (b) A statement of account (including an invoice); (c) A receipt; (d) An order for goods or services; (e) A cheque;
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National Business Names Register Paul Anderson | May 2012
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(f) A promissory note or bill of exchange; and (g) An order to provide goods or services (other than an invitation to treat).
Display of name Under Section 20, an entity must display the business name at every place of which the entity carries on the business that is open to the public.
Registration Under Section 23 an application for registration of the business name must be in the prescribed form and must include the entity’s ABN, the period for which registration is sought and the place and date of birth of any individual applicant. The registration period may be either one or three years unless an alternative registration period is determined by ASIC. Under Section 35, an entity is obliged to lodge with ASIC a notice in the prescribed form of any changes in circumstances relating to the business name. Such notice must be lodged within 28 days. Such changes would include transfer or cancellation of the business name. Under Section 38, a debtor representative of an entity is obliged to serve notice of his appointment within 28 days. “Debtor representative” includes a trustee in bankruptcy in respect of an individual, or a liquidator, receiver or administrator of a company.
For more information, please contact: Paul Anderson Partner T: 02 8257 5742 M: 0418 491 395 paul.anderson@turkslegal.com.au
Review The table in Part 7 sets out various decisions under the Act that are reviewable. Initially, such review will be an internal review made by ASIC pursuant to Section 57. However, application can also be made under Section 58 for review by the Administrative Appeals Tribunal.
Conclusion Introduction of a national register can only be welcomed. There is no reason to think that, subject to the possibility of a brief teething period, the transition will be other than smooth with obvious advantages to all entities conducting business under a business name.
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