Business Name registration v.s. Company Name Registration

A lot of confusion exists surrounding Business name registrations and Company Name registrations.

Often, the confusion is around choosing what is right for your needs.

So, lets break both down and discuss their differences.

What is a business name?

A business name is simply a name under which you conduct a business. You must register a business name in Australia, unless you trade under your own name, or fall within an exemption.
For example, if you trade solely in the Cocos (Keeling) Islands. Registration on the Business Names Register identifies who is behind a business name.

What is a company name?

A company is a separate legal entity registered with ASIC.  A company has its own name which is required to include the legal terms or abbreviations 'PTY' and/or 'LTD' at the end of the name.
A company may choose to register a business name if it wants to carry on a business using its name without the legal terms, or if it wants to use a different name

Business Names – What you need to know

When do I need a Business name?

If you would like to operate and trade under a name which is different to the name of the legal entity.

For example, Jacob Mowing services PTY LTD for a company or Jacob Smith as a sole trader, you require a business name.

If instead you would want to operate simply as Jacob Mowing services, you need to have that name registered.

What is a legal name and how is it different from a Business name?

While a business name is mainly used to conduct a business. The legal name of an entity is the name that appears on all official documents and legal papers. If you have a private company, the legal name typically will have PTY LTD (or any variation of ‘proprietary limited’). If you have registered as a sole trader your full name that was registered with the ABN will be the name of the legal entity. 

How many business names can I have?

You can have multiple business names under a single Australian Business Number (ABN). Having multiple business names can help customers and clients find, identify, and connect with your business.

Is an ABN a requirement for when I register a business name?

Yes, to run a business operation with a registered business name, you need to have an ABN.

How do I choose a good Business name?

The name of your business is at your full discretion. It is important to choose something that will help your customers easily identify and connect with your product or service. You can change your Business Name as your business will grow and change so it is not uncommon for businesses to go through numerous name changes over its life. As such there is no need to stress too much about choosing the perfect name.
However here are a few tips:

• Have the target audience in mind when you’re choosing the name of your business.
• Choose something that excites both you and your customers.
• Make sure it won’t get mistaken for another business name
• Have fun with it. Alliterations such as Brainy Ben, Cool Cakes etc make your Business have a fun ring to it.
  
• Don’t spend too much time on it though. You can always change it at a later date.
  

How do I check if a business name is available?

You can check the availability of a business name by clicking the link to our website Company123 here.
There are three criteria for determining whether a business name is available under the Business Names Registration Act 2011 and the Business Names Registration (Availability of Names) Determination 2015.
These criteria are:

Business names that are identical to an already existing business or company name

A business name is identical or nearly identical to another name if, despite the characters used in the name, it may be pronounced the same as the other name.
For example:

•  ‘Cool@maths’ is the same as ‘Kool at mathz’
• ‘100% fun’ is the same as ‘one hundred percent fun’
• ‘Dollars and scent’ are the same as ‘$ and scent’

Words and expressions taken are the same as another business (schedule 1)

A business name is identical or nearly identical to another name if:

Services that are offered are similar:

For example:
i.     Build, builders, buildings, building services, construct, constructions, construction services, fabrications, developments
ii.    Roofing, roofing services, roof repairs, roof restorations, roofing solution
iii.    Auto body repairs, body repairs, body shop, body works, crash repairs, dent removal, motor body repairs, panel beating, panels, panel works, smash repairs, detailing
iv.    Massage centre, massage therapy, remedial massage, sports massage, therapeutic massage, massage

Locations used are similar:

i.    Australian, Australia, Aussie, Aus, Aust
ii.    Victorian, Victoria, VIC
iii.    Tasmanian, Tasmania, TAS
iv.    New South Wales, NSW etc.

Symbols that are used are similar:

i.    1, one
ii.    2, two etc
iii.    %, percent
iv.    @, at
v.    &, and

Goods that are offered are similar:

i.    Fuel, petrol, petroleum, diesel
ii.    Pics, pix, shots, snaps
iii.    Bedding, mattress, bed
iv.    Fone, phone
v.    Footwear, shoes
vi.    Bicycles, bikes, cycles

Restricted word or expression (schedule 2) 

A word or expression mentioned in Schedule 2 is a restricted word or expression in relation to entities and businesses unless the Minister has given written consent to the use of the word or expression.

For example:
i.    Ambulance, Ambulance service
ii.    Bank
iii.    Chamber of Commerce
iv.    Chamber of Industry
v.    Charity
vi.    Charter
vii.    Credit Union
viii.    Fire Brigade
ix.    GST
x.    Incorporated
xi.    RSL
xii.    Made in Australia
xiii.    Police
xiv.    Stock exchange

You can only use these terms if indeed you have the rights to do so. This also includes using terms such as NDIS without the permission of that government agency.

Undesirable names

A Business Name can be considered undesirable if it is considered by ASIC to be offensive to the general public or members of a section of the general public.

A Business Name can also be considered undesirable if it suggests a connection with any of the following that does not exist.

For example:
i.    The Crown
ii.    Commonwealth Government
iii.    A department, authority, or instrumentality of the Commonwealth Government.
iv.    The Government of a foreign country
v.    A charitable organisation
vi.    Member of the Royal Family

Interestingly the legislation also specifically includes that any non-consensual association with Sir Donald Bradman or Mary MacKillop is not permitted as a Business Name.

Further note that when creating a Business Name, the following do not assist in the differentiation between to Business Names.

They will be considered the same if the only difference is:

1. Use of “a”, “an” or “the”.
2. Use of entity types such as association, co-operative, incorporated, limited, PTY, etc.
3. Whether a word is singular or plural.
4. Font, upper/lower case, spaces, hyphens, punctuation marks, accents.
5. An abbreviation or acronym.
6. Use of domain name indicators such as “www”, “net”, “org” or “com”.

A business name is also a trading name

‘Trading name’ is an old term, and now ‘trading name’ and ‘business name’ can be used interchangeably.

Specifically, a ‘trading name’ refers to an unregistered name that businesses could use before the introduction of the National Business Names Register on 28 May 2012.

A trading name is not a registered business name. Now, any name you wish to ‘trade’ under needs to be registered with ASIC for it to be valid.

The Australian Business Register and ABN Lookup still display unregistered trading names however they will be removed from November 2023 and only registered business names will be displayed.

A transition period from 28 May 2012 to 31 October 2023 is in place to allow businesses affected by the removal of trading names sufficient time to inform their customers, suppliers, and other stakeholders of any changes to the name that they use to conduct their business. However, these businesses can register their old trading names through ASIC to have a valid Business Name.

‘Business name’ is the newest and most correct term and refers to names registered with ASIC after May 2012.

Business name refers to the title your business operates under.

You can register a business name here.

Business names registered in more than one state or territory

If your business name is registered in more than one state or territory, all your business names will have transferred to ASIC's national business names register.

You may now have multiple identical business names registered to you. You can choose to keep one business name record (e.g., the business name with the latest registration expiry date) and cancel the registration of your other remaining business names. There is no fee to cancel a business name.

Keeping only one business name may reduce the administrative burden of maintaining several business name registrations (including receiving multiple notices for each registration) and minimise the potential for confusion from consumers in determining the business name holder’s correct details.

Possible protection of business name over competition.

Even though a Business Name must be unique, it doesn’t grant you any exclusive trading, branding, or ownership rights over that name.

Accessibility of Business Name information 

Most of the information on the Business Names Register is available free of charge. Some information is only available by purchasing an extract.

The fee charged will depend on the type of extract you purchase. It is a good idea to check the free information available before paying for an extract. More information is available about the ASIC fees on their search fees page.

You can buy a current and historical business name extract using ASIC Connect.

Extracts for business name holders cannot be purchased online. You will need to complete an Application for person and organisation information from the business names register.

From there you can find who the current owner of the Business name is and all prior owners of that Business Name whether it be an individual or another entity.

Information that cannot be accessed about a Business Name

Personal information about the Business Name owner is not available to public for reasons of privacy. Examples of private information include the owner’s date and place of birth as well as their residential address.

The Business address can be shown in some circumstances however if the principal place of business is the same as the owner’s residential address, only the city, suburb, state, and postcode will be shown.

The service of documents address will always be displayed in full, even if it's the same as the holder's residential address. You can request that ASIC supress these details on the register.

If ASIC approves a request to suppress details, they'll remove information from their registers. The word 'suppressed' will appear where information has been suppressed.

Do I need to display a record of registration of my Business Name

The owner of a Business name no longer needs to display a record of the registration of that Business name in the shopfront. This used to be a rule however was removed in 2012.

If you still would like a printed version of your certificate or if you would like it framed for your personal needs, you can ask for one on our Business Name Registration form.

However, Businesses must display their business name itself in places where they are open to the public. For example, on their shopfront.

The next steps once my Business Name is registered

Once the business name has been registered, we'll email you a copy of your record of registration. You can then trade using the name.

If your details change, such as changes in your registered address, you must update your details with us.

You must prominently display your business name wherever you're open to the public, like at your storefront. You must also include your ABN on any business correspondence that you send out, like invoices or purchase orders.

Steps to check my business details to see if they are up to date

To check your business name details through the Business Names Index:

Step 1 - Go to ASIC Connect search
Step 2 - Select 'Business Names Index' from the drop-down box in the top right corner
Step 3 - Enter the ABN or name of the business you're looking for (You'll see a list of matching results on the business names register).
Step 4 - Select your business name from the list (You'll see a summary of the business name details. You can also save them as a PDF).

How do I know when my Business Name is ready for renewal?

You can check the renewal date for your registered business name on ASIC Connect. Select the Business Names Register tab and search within the Business Names Index which you select from the drop-down box.

Not renewing your business name

If you don't renew your business name on time, ASIC may cancel it. Find out more about ASIC initiated cancellation of a business name.

Transferring a Business Name to a new holder

The law does not allow you to transfer or assign a business name to another holder. However, you can choose to cancel the business name and notify us of your consent to transfer the business name to another holder.

This can be done in the same transaction. When you submit a request to cancel the business name, select the Cancel and transfer option. We will then email you the transfer number.
You can then provide this number to the new proposed business name holder, where they can use it to apply to register for the business name. If the new registration does not occur within three months from cancellation, the transfer number will expire, and the name will become available for the public to register.

Company registration in Australia involves setting up a company as its own legal entity, which lets you conduct business throughout Australia.

You can also make use of other privileges, such as corporate tax rates or limited liability.

Company Names – What you need to know

The most common types of companies in Australia:

• 'Proprietary Limited' companies (Cannot raise money from the general public through share issues).
• 'Public' Companies (Usually formed to raise or borrow public money by listing the company's shares for trading on a stock exchange).
  

All companies are governed by the Australian Securities and Investments Commission (ASIC), which administers the Corporations Act 2001 (Commonwealth) and other legislation. Public companies must also comply with the rules of the Australian Stock Exchange.

Advantages of a company include:

• Liability for shareholders is limited. As a general rule, companies carry legal and commercial risk as a separate legal entity which is separate entity to the shareholders/ directors that control the company.
• It's easy to transfer ownership by selling shares to another party. Simple transfer forms can be completed to transfer the company shares to a new shareholder.
• Shareholders (often family members) can be employed by the company with flexible income tax rules on distribution of income. Enjoy the use of tax credits company pays which may be passed on to shareholders (i.e., no double taxation on company profits in the hands of shareholders in most cases).
• The company can trade anywhere in Australia. A Private company can also trade in Overseas jurisdictions. Please consult your tax professional for additional tax advice.
• Taxation rates can be more favourable than personal individual tax rates. Private companies currently enjoy a flat 27.5% tax rate where annual turnover of a company is less than $50m.
• Enjoy access to Research & Development and Export Development Grant concessions which are generally available only to PTY LTD companies (not sole traders). 

Disadvantages of a company include:

• The company can cost more to establish, maintain and wind up then a sole trader business.
• The reporting requirements can be more complex; however, the general advantages of a company often outweigh the additional compliance fees associated in running a company.
• Your financial affairs of the company are governed by ASIC and information about directors and shareholders can be viewed by public.
  
• If directors fail to meet their legal obligations, they may be held personally liable for the company's debts including profits distributed to shareholders are taxable. However, tax credit that company pays may be available to the shareholders.
• Setting a private company is east. Visit www.company123.com.au website where you will find useful links and information to register a company in under 5 minutes. Company123 offers simple all-inclusive solution whether you a business owner setting up a business or you run an accountancy or legal practice and set up companies for Clients. Our support line is open 24/7 if you have any questions and we are always here to help and assist you with any of your questions.

What are the requirements for company registration in Australia? 

Step 1 - Fill in a company registration form at Company123
Step 2 - Receive all company documents within minutes, sign, and file
Step 3 - Receive ABN, TFN and GST registration (if necessary) and begin operations

What information is needed to register a company online?

For online registration, you will need to provide the following information:
For Directors & Secretaries:

• Full name.
• Full residential address.
• Date and place of birth of each person.
  

For Shareholders:

• Full name
• Address
• Number of shares for each shareholder of the company.

General Information: The address of the registered office and principal place of business.

You must get written consent from the people that will fill these roles:

• Director (must be over 18)
• Secretary (must be over 18)
• Member (every company must have at least one member).

Who can register an Australian company? 

Anyone can, however you must have at least one director that resides in Australia and a physical Australian address for the registered office of the company. If none of the directors are eligible to work in Australia, you will be able to register a company, but you may not be able to trade.

If in doubt we recommend that you discuss your needs with an accountant or solicitor for professional advice. Company123 provides free consultations if needed and over the phone advice within business hours of 9-6pm at 03 9832 0660.

In terms of providing Australian directorships, Company123 cannot provide a registered office service or resident director service to international applicants. To find some providers do a search for 'resident director service Australia'.

These are the differences between Business name registrations and Company Name Registrations.

Both are very different from each as they have different purposes.