Business Names
It’s cheap. And it works.
Do you run a business in SA? And I’m not just talking about the construction, security or real estate businesses I service. I’m talking about your local corner deli right through to major companies who are based in SA that trade to the rest of Australia. They all have (or should have) a business name registered through ASIC!
When should I register a business name?
Ok, I think the best way to tackle this is through real world examples. Example 1:
Let’s say you’re an electrical sole trader called Sam Smith. You want to be known as ‘Sam Smith Sparky Specialist’ and that’s the name you’ll have on the side of your van. That’s defined as a business name and it must be registered online through ASIC.
Now for a different scenario in Example 2:
You are the director of a company called Sam’s Electrical Services Pty Ltd and you want to trade using that name because you think it’s the perfect name for customers to remember your services. Well, in this instance if you use the exact company name as the business name, “Sam’s Electrical Services”, then you will not have to register it separately. Remember, it has to be word-for-word.
The final scenario, Example 3:
Let’s say you’re a sole trader or partnership that’s already registered a business name (i.e. Sam’s Security Systems) and are now looking to trade as a company (Pty Ltd), what happens to your business name? Simple. It’s a transfer of ownership from sole trader to company. I did it myself and it took 20 minutes to complete online.
*The important thing to remember is that a business name is a name only. It holds no legal weight in relation to ownership. A company is an entity in itself with a different corporate tax rate and limited liability. For licensing purposes, a company is treated as a person in its own right.
Why have a business name?
Easy answer. In Australia under the Business Names Registration Act 2011, you are legally required to register a business name that’s not your own. Not registering your business name can lead to fines and unnecessary paperwork. Registering a business name prevents other people from trading under your exact business name. Trademarking your business name through IP Australia is a formal way of owning your business name.
Business names are cheap. Get Registered.
It only costs $34 to register a business name annually (as of 8 September 2015) and the entire process is online. The process is much simpler these days and automatic approval given, I know because I’ve done it many times. However, you need to be careful about the business structure in deciding whether an individual or company will own the business name. Don’t worry too much if you make a mistake or your circumstances change months later as it’s only $34 to transfer the name.
FINAL THOUGHT
SA Trade Licensing will review your entire business structure to make sure you’re compliant and guarantee that the right business or company name is registered against the right applicant. We will offer realistic and practical advice about business or company names and the best way to approach it from a consumer’s perspective. Getting it right from the start will save you a lot of paperwork in the future.