You and your business partner have finally settled on the name. The domain name is parked, the logo is approved, and you are laying out the first invoices, when someone asks whether you have registered the business name. It is a fair question, because the answer determines what name you may lawfully trade under, what must appear on your invoices, and whether you are exposed to a fine of up to 30 penalty units under Commonwealth law. This article sets out how the registration rules apply to partnerships and the factors worth weighing before you decide.
Two ways to trade, and one real question
For a partnership, the decision is really about the name, not about the paperwork. A partnership can lawfully trade in one of two ways:
- Under the partners' own names: If the name consists of the partners' names, the partnership trades under its legal name and no business name registration is needed.
- Under a registered business name: Any other name, from 'Adams Plumbing' to 'S&W Jewellers', must be registered as a business name on the national register before the partnership trades under it.
The real question hiding behind 'should I register a business name' is narrower: is the name I intend to trade under actually my own name? If it is, registration is unnecessary. If it is not, registration is compulsory rather than a choice. Since business names moved to a single national register, a name is registered once with ASIC, and there is no separate state or territory registration to worry about.
Two assumptions commonly trip partnerships up. The first is that registering a business name gives you ownership of the name. It does not. Registration is an identification requirement, and the Business Names Registration Act 2011 (Cth) makes clear that registering a name does not give you property in it. The second is that a partnership always needs a business name. That is wrong too, provided the partnership trades under all of the partners' names. Both points are developed below, because they shape the factors that matter.
Trading under a business name or your own names
Are you trading under your own names?
The starting point is s 18 of the Business Names Registration Act 2011 (Cth). It is an offence to carry on a business under a name that is not registered to you as a business name, but the offence does not apply where the entity is a partnership and the name consists of all of the partners' names.
ASIC's guidance to that exemption is strict. Trading under your own name means using your first name and surname and nothing else. For a partnership, the name is made up of the partners' names, such as 'Peter Nguyen and Helen Lee'. ASIC gives the example that those two partners would not need to register 'Peter Nguyen and Helen Lee', but would need to register 'Nguyen & Lee Plumbing'.
The comparison in practice:
- Own names, no registration: 'Susan Adams and William Wilson', used exactly as the partners' names, with nothing added.
- Registration required: 'Adams & Wilson', 'S&W Jewellers', 'Adams Plumbing', or any other name that adds to, shortens, or rearranges the partners' names.
One grey area is worth flagging. Partnership names are often shown on registers in shortened form, such as 'Adams S & Wilson W', and people sometimes assume that trading in that form is still their own name. Because ASIC's guidance contemplates first names and surnames, an initials-only version is not clearly within the exemption. It is worth checking with ASIC or a lawyer before relying on it.
Does the name do more than name you?
A business name is how your customers know you and how you stand apart from competitors. If you want the business to be known by a brand that is more than the partners' names, registration stops being optional.
The points that push a partnership into registration:
- The name includes a descriptive or invented element, such as 'Coastal Ceramics' or 'Verde Interiors'.
- The name uses only part of the partners' names, such as 'Wilson Design'.
- The name adds a suffix or descriptor, such as '& Co' or 'Consulting'.
- You want one brand to carry the partnership through later changes, such as a new partner joining.
In each case the partnership trades under a name that is not the partners' names, so registration is required before the name can lawfully be used.
What does it cost not to register?
Under s 18(1) the penalty is 30 penalty units. A penalty unit is currently $330 under s 4AA of the Crimes Act 1914 (Cth), so the maximum fine is about $9,900, and the offence applies while the partnership trades under an unregistered name. The practical costs can exceed the fine:
- Banks and payment providers commonly ask to see the registered business name before opening accounts or processing payments.
- Customers and suppliers who cannot match your invoices to a register entry may be slow to pay, because the name on the invoice leads nowhere.
- A dispute over who is behind the business is harder to resolve when there is no register record showing the partnership and its ABN.
- The registration fee is $47 for a year, so the downside of non-compliance is not close to proportionate to the cost of doing it properly.
Is the name available, and does anyone hold a trade mark?
A business name can only be registered if it is available. Under s 25 of the Act, a name is available if it is not identical or nearly identical to another registered business name, a reserved or registered company name, or a name on a notified state or territory register. ASIC's name availability search uses a traffic light system: green means the name is available, amber means it will be assessed, and red means it is unavailable. An amber result can simply mean the word is unfamiliar to the system, such as a made-up or unusually spelled word, and the name will be assessed manually.
Availability on the business names register is not the whole story. The Business Registration Service makes the point directly: you cannot register a name that is someone else's registered trade mark, and IP Australia's TM Checker is the tool to use before you commit. If a name breaches another law, the responsible body can tell you to stop using it, and ASIC will not refund the registration fee. Registration can also be cancelled by court order where the name infringes a registered trade mark. Registering a business name therefore does not protect you from a trade mark claim, and checking for conflicts before you register is part of the decision.
The obligations that come with registration
Before you can register, the partnership needs an ABN. The application must include the partnership's ABN, or the reference number of a pending ABN application, together with the address of the principal place of business and an address for service of documents. You can apply for the ABN and the business name together through the Business Registration Service. Once registered, the obligations are ongoing rather than one-off:
- Fees and term: registration runs for one year ($47) or three years ($108) at current rates, and you choose the term when you apply.
- Renewal: ASIC sends a renewal reminder at least 30 days before expiry, and if the name is not renewed in time ASIC may cancel the registration.
- Use it or lose it: ASIC may cancel a business name where the partnership is not carrying on business under it.
- Display and documents: the business name must be displayed prominently wherever the business is open to the public, and the registered name and ABN must appear on invoices, purchase orders and similar documents.
- Keep details current: changes to the partnership's details, such as the principal place of business or the partners themselves, generally need to be advised within 28 days.
What registration actually gives you
Registration gives you identity, not ownership. It links the name to the partnership's ABN so that customers, suppliers and regulators can identify who they are dealing with, and it stops another entity registering the identical or nearly identical name. It does not give you property in the name, and it does not stop someone using similar words.
If the name is a genuine asset of the business, the separate step is registering a trade mark, which is a different application with IP Australia and gives the exclusive right to use the mark for the goods and services it covers. For many partnerships the business name question and the trade mark question should be answered together, because the trade mark is what protects the brand you build, while the business name registration is what lets you trade under it lawfully.
How an Artificer Legal practitioner can help you decide
The registration itself is a straightforward online form, but the decision around it rarely is. An Artificer Legal practitioner can stress-test the assumption that your name falls within the exemption, including the initials-only and abbreviated versions that sit in a grey area. They can run and interpret the availability and trade mark searches, and flag the names another trader could later challenge. They can also model the downside, from the penalty exposure to the practical problem of trading under a name that banks and payment providers will not recognise.
For partnerships the practitioner's role usually extends beyond the application. The partnership agreement should deal with the business name: who owns it if the partnership ends, what happens if a partner leaves, and who can bind the partnership to a new name. Because the exemption turns on 'all of the partners' names', a change of partners can change the legal name, and a practitioner can advise on whether the registration needs to be updated. They can also prepare and lodge the ABN and business name applications, advise on the term and renewal, and tell you whether a trade mark application is worth the additional cost.
The name is the decision, not the fee
The mistake that costs partnerships the most is treating registration as a form of ownership and the fee as the question. The real decision is the name. If the name is anything more than the partners' names, registration is compulsory, and at $47 a year it is the cheapest part of the exercise. The expensive mistakes are trading under an unregistered name, with a fine of up to about $9,900 at current penalty unit rates, and building a brand on a name another trader owns as a trade mark. If the name genuinely matters to the business, the question that follows registration is whether to register a trade mark, because registration alone gives you identity rather than exclusive rights.
To sum up: a partnership trades under its legal name, made up of the partners' names, or under a registered business name. The exemption for own names is narrow, and any addition, abbreviation or invented element makes registration compulsory under s 18 of the Business Names Registration Act 2011 (Cth). Registration requires an ABN, runs for one or three years, and carries ongoing obligations around display, documents, renewal and updating details. Registration identifies you to the market; it does not give you ownership of the name. Where the name is a real asset, the partnership agreement and a trade mark application deserve as much attention as the registration itself.