Recent legislative and industry updates have introduced significant changes, including increased duty and extended vesting dates for trusts, broader electronic signing capabilities for companies, and additional guidance on the classification of discretionary trusts as foreign entities. […]
What’s in a Company Name?
Matt Neibling, current as of: 9 November 2017.
Every business owner understands how critical their trading name is in distinguishing their business, products, services and brand from competitors. What many seem to have lost sight of, however, is how vulnerable that name can be, even if it’s registered with ASIC.
The problems begin in the very early days of a business when a trading name is first decided. Many professional advisers and their clients will initially turn to the internet, then a domain search and an ASIC search for available company and business names. The hope is that the first choice is available, and registration can proceed. Unfortunately, that is not the whole story.
Simply put, just because a name is registered with ASIC, it doesn’t necessarily entitle you to use it as your trading name.
The reason? ASIC will register any name not considered to be identical to an existing registered name. This means you can register pretty much anything, with only minor differences. A common tactic is to insert “Australia” or add “Enterprise” or something similar, to secure a desired name.
The onus is on the applicant and their adviser to determine if the name they want is one under which they are entitled to trade.
This wasn’t always the case. In the past, company and business names had to be significantly different before they could be registered. When the regulator was doing the thinking for everyone, there was more consideration given by applicants to registering new names.
When we pair this change with the DIY-mindset among business owners regarding registration of trading names, domains and trade marks, we see a perfect storm of confusion and potentially very costly infringements.
The risk for businesses is that problems will surface only once they are established, and they could find themselves facing the significant cost and impact of a rebrand or more drastic action.
The issue of trading names has apparently become prevalent enough that ASIC has itself addressed the question “what’s in a name?” in its latest newsletter. We’re not sure, however, that ASIC’s approach in directing applicants to IP Australia for trade mark searches is going to reduce the risk of infringement. In our experience, the task of searching and registering trade marks is not for the layperson and should be left to specialists.
This is where advisers play a vital role by having the all-important “name” conversation with clients at the very start of a new venture. By guiding clients through the complexities of searching for, and registering, company and business names, domains and trade marks.
Feel free to contact us any time to discuss registration of company and business names.