Do I need to Register a Business Name?

Business Names – The Basics

The Business Names Acts in the various States and Territories around Australia require businesses to register their trading names if they differ from their legal names.

The main purpose of the business names register is to enable consumers and traders to work out who they’re trading with. For example, if a person is thinking about engaging a builder which markets itself as “Accent Homes”, he or she can search the register to find out who the owner is: whether it is a sole trader by the name of “Aaron Carpenter” or a company called “The Acme Building Co Pty Ltd”.

Usually, it will be clear whether a business name needs to be registered or not. This will happen when the actual entity or entities that are trading have chosen to adopt a different trading name. For example, if a company called “Donatti Group Trading Pty Ltd” wants to trade as “XenTech Software”, it would need to register “XenTech Software” as a business name.

However, there are a few instances when it is not so obvious, and we consider some in this post.

Individuals and Business Names

Under the Business Names Acts, individuals (also referred to as sole traders or sole proprietors) have the right to trade under their own names. This means that someone called “Josephine Anne Bloggs” would usually be allowed to trade as “Josephine Anne Bloggs”, “Josephine A. Bloggs”, “Josephine Bloggs”, “Jo Bloggs”, “J. Bloggs” or “J.A. Bloggs” etc without having to register her name as a business name.

Also, in theory there’s nothing to prevent Jo Bloggs from registering her name as a business name (subject to whether there were any similar names already registered etc), and this is something that she might well consider doing.

However, Jo Bloggs would be required to register a business name if she decided to add any words to her name. For example, “Jo Bloggs Homes”, or “Jo Bloggs Constructions” would require registration.

Companies and Business Names

Companies frequently trade under their own names, especially when the names of the companies describe what they do. For example, a roofing company might be called, and trade as “Newlines Roofing Pty Ltd”. In these circumstances, the company is using its actual name, and would not need to register a business name.

If the company wanted to trade using the name “Newlines Roofing” without the “Pty Ltd”, it would need to register a business name. Under the Corporations Act, the words “Proprietary Limited” and “Limited” etc (or various acceptable abbreviations such as Pty Ltd) must be included at the end of a company’s name. This name then needs to be displayed at certain premises and on various documents. However, if the company were using a registered business name rather than its legal name (i.e. its company name), it would not have to use the “Pty Ltd” suffix.

Partnerships and Business Names

Generally, partnerships register their business names: “A. Smith and E. Chen” doesn’t make a very compelling busines name, and becomes cumbersome as the number of partners increases. Further, the composition of partnerships change over time, and it would be impractical to keep changing the stationery every time a new partner was added or an existing partner dropped out. Registration of a business name solves all of these problems.

However, not all types of partnership are required to registered their business names. The partnership legislation in most states and territories allows for the registration of “limited partnerships”. A particular form of these (”incorporated limited partnerships”) are often used by venture capitalists. In some states, including Victoria, limited partnerships are not subject to the requirements of the Business Names legislation.