Trading Names were slated to be abolished in favour of ASIC Business Names from 1 November 2018. The deadline was to fall after a 6-year transition period to allow businesses time to transfer over to the ASIC Business Name system.
However, the Australian Government has granted Trading Names a last-minute reprieve, announcing that it is extending the transition period for a further 5 years until 1 November 2023.
What is a Business Name?
A Business Name is a name officially registered for a business.
Prior to 2012, business name registrations were administered by various State and Territory agencies, such as Queensland‘s Office of Fair Trading.
Since 28 May 2012, registration of Business Names has been administered nationally by ASIC under the Business Names Registration Act 2011. Existing State and Territory business names were migrated onto ASIC‘s national register upon commencement.
Under the legislation, a business must register a Business Name if it trades under a name that is not identical to its legal name.
What is a Trading Name?
A Trading Name was a name used by a business that was not previously registered on a State or Territory Business Names Register or on ASIC‘s national Business Names Register.
The ABN system, which commenced on 1 July 2001 with the implementation of Australian Goods and Services Tax (GST), allowed for unregistered Trading Names to be recorded with an ABN. Registered Business Names also appear on the ABR where the Business Name holder has a linked ABN.
On commencement of the ASIC Business Names Register, the Government began a transition period to retire unregistered Trading Names in favour of registered Business Names. The initial transition period was due to end on 31 October 2018. Businesses would then need to register a Business Name with ASIC if required.
What does the extension mean for Businesses?
The changes announced extend the life of Trading Names for a further 5 years until 31 October 2023. Businesses that still use Trading Names will be able to do so until the end of the extended period before being required to transition to the ASIC Business Name system.
While the deadline has been extended, businesses will still need to consider whether they need to register an Business Name with ASIC, and take steps to apply for registration before the end of the extended transition period.
From the end of the transition period, Trading Names will no longer be linked to ABNs or displayed on the Australian Business Register.
Businesses should be mindful that trading without holding a registered business name when required may constitute an offence under the Business Names Registration Act.
Businesses should also consider protecting their brands with a registered trade mark. For more information about the differences between a trade mark and a business name, read this post.
Xuveo Legal provides advice and assistance for registration of business names, companies and trade marks. Please contact us or your professional adviser for further information and advice or to register a business name.
The Australian Government has published an article on the differences between business names, trading names and legal names here.