When you must register an Australian business name

If you carry on a business in Australia under a name that is not your own name, federal law requires that name to be registered on the national Business Names Register. Trading under an unregistered name is an offence carrying a maximum penalty of 30 penalty units, which is $9,900 at the current rate. The registration itself is cheap, currently $47 for one year or $108 for three, but it brings ongoing duties: displaying the name, putting it on your invoices and receipts, keeping your details current, and renewing before the term lapses.

Most small businesses do not trip up on the fee. They trip up on the threshold question of whether they need to register at all, because the answer depends on the structure you trade through and on exactly what name you use. This article sets out who the obligation applies to, the steps to register, the duties that follow registration, and what happens if you get it wrong.

Who must register: the "own name" test

The starting point is s 18 of the Business Names Registration Act 2011 (Cth) (the BNR Act). An entity commits an offence if it carries on a business under a name that is not registered to it as a business name on the Business Names Register, which ASIC maintains. The exemption in s 18(2) is the mirror image: the offence does not apply where the name is the entity's own name, being an individual's own name, a corporation's registered name, or a partnership name consisting of all the partners' names.

So the question every business owner answers is simple: is the name I trade under my own name, or something else? The table sets out how the test applies across the common structures.

Sole traders: a descriptor makes it a business name

If you operate as a sole trader under your first name and surname only, you do not need to register a business name. ASIC is explicit about the boundary: if you are operating under your own name, it must be your first name and surname "and nothing else". "John Smith" needs no registration; "John Smith Gardening" and "John Smith & Co" do.

Your ABN does not change this. The ABN identifies you for tax purposes, and applying for one does not record any trading name or put one on any register. If you want the name your customers see to be anything other than your own name, that name has to be a registered business name. In practice, that means a sole trader rebranding from a personal name to a business name applies for the business name separately, using the ABN already held.

The exposure is easy to underestimate. Every invoice sent under an unregistered name is a further step in the s 18 offence, so the longer a rebrand runs unregistered, the larger the exposure.

Partnerships: all the partners' names, or register

A partnership's own name is a name made up of all the partners' names. Two partners trading as "Annabelle Tran and Marcus Webb" need no registration, because the name consists of all the partners' names. But that is rarely how partnerships trade. Using surnames and initials, as in "Tran & Webb", or adding a trade, as in "Tran & Webb Plumbing", takes the name outside the exemption, because it is no longer a name consisting of all the partners' names. Either variation must be registered.

The application is made in the partnership's name, and each partner's details and ABN are given on the application. The registered business name is then the name the partnership displays and uses on its documents.

Companies: the registered name exemption and the ACN option

A company already has a registered name: its name on the ASIC company register, complete with the "Pty Ltd" suffix. Trading under that exact name needs no business name registration, because s 18(2)(b) exempts a corporation trading under its own name.

Two mistakes are common here. The first is trading under a shortened version of the company name. If "Acme Plumbing Pty Ltd" trades as "Acme" or "Acme Plumbing", the company's own name is the full registered name, and the shortened name is a business name that must be registered. The second is assuming a company must choose a name at all. Under s 148(1) of the Corporations Act 2001 (Cth), a company may have as its name either an available name or the expression "Australian Company Number" followed by its ACN, so a company can be "ACN 123 456 789 Pty Ltd" without choosing a trading name. That ACN-based name is the company's own name for the purposes of the BNR Act exemption, and under s 153 of the Corporations Act the company must set out its name, and the ACN, on its public documents.

Registering the company does not, by itself, register any business name. If the company trades under a name other than its registered name, that name must be registered as a business name to the company, and the company name on the corporate register stays what it is.

Trusts: the trustee registers, not the trust

Trusts are a common structure for family businesses, and they are easy to get wrong. A trust is not a separate legal person, so under s 5 of the BNR Act the trustee is taken to be the entity. It is the trustee, in that capacity, who applies to register a business name and who appears on the register as the holder. If the trust trades under the trust's name, or under any name other than the trustee's own name, that name must be registered to the trustee. A business operated by a family trust under a name like "Harbourview Investments" therefore needs a business name registration held by the trustee, not by the trust.

How to register: ABN, name check, fees and timing

The application itself is a straightforward online form, but it has prerequisites. Under s 23 of the BNR Act the application must include your ABN, or the reference number of a pending ABN application, your principal place of business in Australia, an address for service of documents, the business name, the registration period sought, and confirmation of whether you are disqualified:

• Check availability first: The ASIC register search returns a traffic light result: green means available, amber means ASIC needs to assess the name after you apply, and red means unavailable, usually because the name is identical or nearly identical to a name already on the register or does not meet ASIC's rules. You cannot register a name that someone else has registered as a business name or trade mark.
• Lodge and pay: You can apply through ASIC Connect or through the Government's Business Registration Service, which can also handle a simultaneous ABN application. The current fees are $47 for one year and $108 for three years. The fees are set by regulation and indexed each 1 July in line with the Consumer Price Index, so check ASIC's current schedule before paying.
• Pay on time: If the registration fee is not paid within ten business days of lodging, the application is taken to be refused under s 30 of the BNR Act. If ASIC refuses the application on its merits, it refunds the fee under s 34.
• Expect confirmation quickly: If all information is correct and the fee is paid, confirmation usually arrives within two business days for credit card payment and five business days for BPAY, EFT or bank transfer.
• Renew before expiry: Registration runs for one or three years under s 55 of the BNR Act. ASIC emails a renewal notice at least 30 days before the renewal date, and renewal can be completed online. If you do not renew on time, ASIC may cancel the registration. Companies can ask ASIC to align the business name renewal with the company's annual review date.

Display, documents and updates: the ongoing duties

Registration is the beginning, not the end. Three ongoing duties follow, and each carries its own penalty:

• Display the name: Under s 20 of the BNR Act, the business name must be displayed prominently at every place where the business is carried on and that is open to the public. A shopfront trading under a registered business name must show it. The maximum penalty is 5 penalty units, $1,650 at current rates.
• Put the name and ABN on business documents: Under s 19, invoices, receipts, statements of account, orders for goods or services, offers to provide goods or services, cheques and similar instruments must carry clearly legible business names information, which means the registered business name and the ABN. Other written communications must at least carry the name. The maximum penalty is 5 penalty units.
• Keep your details current: ASIC must be told about changes to your details, usually within 28 days. The public can search the register, so a stale address or holder details is a customer-facing problem as much as a compliance one.

What happens if you get it wrong

The consequences of getting the registration question wrong range from a fine for each occasion of unregistered trading to losing a name that has been left dormant:

• Unregistered trading: The s 18 offence carries a maximum penalty of 30 penalty units. Each penalty unit is currently $330, so the maximum fine is $9,900, and the offence applies to each occasion of trading under the unregistered name.
• Disqualification: People who cannot hold a business name, for example because of certain criminal convictions or disqualification from managing corporations, commit a separate offence carrying 30 penalty units if they carry on business under a business name while disqualified.
• Cancellation of a dormant name: Under s 47 of the BNR Act, ASIC may cancel a registration if the business has not been carried on under the name for three months, after giving at least 28 days' notice and a chance to respond. Registering a name and "parking" it is therefore risky.
• Brand risk, not just penalty risk: A registered business name protects you against someone else registering an identical or nearly identical name. It does not stop other people using similar words, and it does not protect you against legal action if your name infringes someone else's trade mark. A business name is an identifier, not a trade mark: for enforceable rights in the name itself, you need a separate trade mark registration.

Compliance checklist

Work through these steps to stay on the right side of the regime:

• Apply the own-name test to every name you trade under, including shortened and descriptive versions.
• Search the ASIC register for availability before you commit to branding.
• Register through ASIC Connect or the Business Registration Service, with your ABN in hand.
• Display the registered name at every premises open to the public.
• Put the business name and ABN on invoices, receipts, orders and offers.
• Tell ASIC about changes to your details within 28 days.
• Diarise the renewal date and act on the renewal notice.
• If the name matters commercially, run a trade mark search and consider registering a trade mark.

When a lawyer helps

The registration itself is a form you can complete in about fifteen minutes. A lawyer earns their fee around the edges: running trade mark clearance searches before you commit to a name, deciding which entity should hold the name where a trust or multiple companies are involved, responding to ASIC notices, and dealing with disputes when another business adopts a similar name. If you are incorporating at the same time, or the name is central to your brand, a short consultation is a sensible cost.

The registration trap: "your own name" is narrower than you think

The duty most often missed is the descriptor trap. "John Smith" is exempt; "John Smith Gardening" is not, and the same logic catches partnerships that trade under surnames and companies that trade under shortened names. The other costly misunderstanding is treating a registered business name as brand protection, when it is only an identifier. The first action to take this week is to apply the own-name test to the name on your current invoices. If you are trading under anything beyond your own name and it is not on the register, register it before you send the next invoice: the penalty exposure compounds with every document, and the register is the only place your customers can verify who they are dealing with.