What’s in a name?

Registration requirements for trading names in Australia

In Australia you can only trade under your own name, or under a registered business name. Below are some basic rules about selecting and registering trading names.

Corporations

A corporation can choose any name that is not identical to another registered company or business name. The name must indicate the company’s legal status (for example, a proprietary company limited by shares must have “Pty Ltd” or “Pty Limited” in its name).

The rules for ascertaining whether a name is identical to another are set out in Schedule 6 to the Corporations Regulations. The Schedule also describes names that are not suitable for registration (for example, names containing offensive words or suggestive of illegal activity), and lists words and phrases that can only be used for certain types of organisations, or with consent (for example, companies using “bank”, “building society” and “credit union” in their name must be institutions approved by APRA).

If a company wishes to trade under another name it must register that name as a business name. The registration of business names is now administered nationally, so there is no longer a requirement to register a business name in each State and Territory where the name is to be used. The rules regulating the availability of names are similar to the rules contained in the Corporations Regulations.

Sole Traders, Partnerships and Unincorporated Joint Ventures

If you are a sole trader, partnership or unincorporated joint venture, your options are limited. You can’t be too creative with your trading name, unless you register a business name. For example, you can trade as “J Smith, plumber”, but you cannot trade as “John Smith Plumbing”. For this reason, most sole traders and partnerships register a business name.

As described above, business names are now regulated nationally, and the process of applying for a business name is reasonably straightforward.

Trademarks

Registration of a company or business name does not give you a proprietary interest in the name. All it does is stop others from registering identical names.

If you have a unique trading name that has, or over time is likely to have, significant goodwill attached to it, you should consider registering the name as a trademark. Registration will give you proprietary rights in the name, which can be enforced to regulate or restrict the use of the trading name by others. Unfortunately, registration can be costly and is not suited to every case.

On the flip side, you should not register a company name or business name that is similar or identical to a registered or pending trademark. If you use a registered trademark in your company name, you will be exposing yourself to the risk of enforcement action by the trademark owner.

Practical Tips

When choosing a company name check for similar names by doing a search of the ASIC Company and Business Names Database and the IP Australia Trade Marks Database.

When trading under a name other than your own, register a business name.

Consider whether your trading name is capable of being registered as a trademark, and whether there are significant benefits in doing so. Registration of a trademark will be beneficial if significant goodwill is attached to the name.

Click here to read more of our Know-How articles.