Reforms to the current State based business name registration systems, which were originally announced in 2010, appear to be finally coming to fruition with the announcement that the National Business Name Registration Service is due to commence on 28 May 2012. While this date is still subject to the passage of relevant legislation through the respective State and Territory parliaments it does suggest that the new national system is close to becoming a reality. Accordingly, franchisors need to start considering what this will mean for them.
The National Business Name Registration Service will make registering business names considerably easier than the current regime, which requires registration of a business name in each individual State and Territory in which it is used. The new service will allow parties to register a business name with one central, national body. The registration will then apply throughout Australia. This will minimise the administrative burden of juggling multiple registrations and may also be cheaper.
In addition, the Australian Securities and Investments Commission (which will oversee the new service) has indicated that business name owners with more than one registered business name will be able to align the renewal dates for those business names, in order to further reduce the administrative burden of dealing with business names.
While the new service heralds a step forward from an administrative and cost perspective, franchisors need to consider how the new system will impact them. For instance, given that business names will now be dealt with at a national level franchisors should ensure that no two franchisees are permitted to use the same business name. Franchisors should also consider how they intend to deal with the new service, given that the service will predominantly be an online service. While this will expedite registrations, franchisors need to consider whether they will attend to each registration or whether they will permit their franchisees to undertake registrations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
