Publications - Corporate & Commercial
Getting the Name Correct
January 2019
Snapshot
Starting a business involves some obvious steps and some less so obvious. Obvious steps might include assembling a team with complementary skills, choosing a business name, incorporating a company, negotiating a shareholders’ agreement, establishing shareholding arrangements through a family trust or similar, and registering proprietary intellectual property.
Less obvious issues could include the relationship between the company’s name and the business name and how they are correctly used.
___________________________________________________________________________________________________________________________________________
Choosing and Using a Name
The business name, which will be part of the businesses branding, can dominate the presentation of the business online and in physical documents, provided the business name is registered.
If your business name is the same as your company’s name, there is no need to separately register company’s name as a business name unless you intend to abbreviate the company’s name: e.g. My Business Pty Ltd abbreviated to My Business.
As the business is to be conducted through a company structure, each document published by the business will be a document issued by the company. Therefore, each of the business’s public documents and instruments must comply with the requirements of the Corporations Act 2001 (Cth) relating to the use of a company’s name and its ACN (Australian Company Number) or ABN (Australian Business Number).
A public document is defined as a document which will be lodged with the Australian Securities and Investments Commission (ASIC), or an instrument signed in the course of a particular transaction (e.g. agreements, deeds and other formally executed documents), or business letters, statements of account, invoices, receipts, orders for goods or services, and official notices.
On each of these documents, the full correct name of company immediately followed by the ACN should be used where the name of the company is first used. The name and ACN in a footer in correspondence is taken to comply with this requirement, notwithstanding that the footer may appear after the first use of the company’s name.
Names on the Internet and in Social Media
The requirements for webpages, other online publications and electronic data interchanges (e.g. emails) are not the same. ASIC takes the view that Parliament’s intention concerning identity of counterparties is achieved by arrangements governing electronic data interchange transmissions. Those arrangements are designed to ensure that recipients know the identity of the party with whom they are dealing. Therefore ASIC “will not enforce the company name and ACN provisions in relation to EDI communications unless it finds that the means used in those systems to identify participants to one another by adequate.”[1]
Accordingly, the business name can be used without reference to the company name or ACN in constructing the website and in transmitting other electronic data interchanges.
However, documents which are accessible through a website or which are dispatched via email and which are reasonably likely to be printed and used independently of the website or email should be prepared in a manner which complies with the requirements for physical documents referred to above. The circumstances could amount to a situation where ASIC considers that the communication of the of participants is inadequate if full names, ACN (or ABN in many cases) as well as addresses are not shown.
[1] Australian Securities and Investments Commission, Regulatory Guide 13 (at 7 August 1995) rg 13.38.
Starting a business involves some obvious steps and some less so obvious. Obvious steps might include assembling a team with complementary skills, choosing a business name, incorporating a company, negotiating a shareholders’ agreement, establishing shareholding arrangements through a family trust or similar, and registering proprietary intellectual property.
Less obvious issues could include the relationship between the company’s name and the business name and how they are correctly used.
___________________________________________________________________________________________________________________________________________
Choosing and Using a Name
The business name, which will be part of the businesses branding, can dominate the presentation of the business online and in physical documents, provided the business name is registered.
If your business name is the same as your company’s name, there is no need to separately register company’s name as a business name unless you intend to abbreviate the company’s name: e.g. My Business Pty Ltd abbreviated to My Business.
As the business is to be conducted through a company structure, each document published by the business will be a document issued by the company. Therefore, each of the business’s public documents and instruments must comply with the requirements of the Corporations Act 2001 (Cth) relating to the use of a company’s name and its ACN (Australian Company Number) or ABN (Australian Business Number).
A public document is defined as a document which will be lodged with the Australian Securities and Investments Commission (ASIC), or an instrument signed in the course of a particular transaction (e.g. agreements, deeds and other formally executed documents), or business letters, statements of account, invoices, receipts, orders for goods or services, and official notices.
On each of these documents, the full correct name of company immediately followed by the ACN should be used where the name of the company is first used. The name and ACN in a footer in correspondence is taken to comply with this requirement, notwithstanding that the footer may appear after the first use of the company’s name.
Names on the Internet and in Social Media
The requirements for webpages, other online publications and electronic data interchanges (e.g. emails) are not the same. ASIC takes the view that Parliament’s intention concerning identity of counterparties is achieved by arrangements governing electronic data interchange transmissions. Those arrangements are designed to ensure that recipients know the identity of the party with whom they are dealing. Therefore ASIC “will not enforce the company name and ACN provisions in relation to EDI communications unless it finds that the means used in those systems to identify participants to one another by adequate.”[1]
Accordingly, the business name can be used without reference to the company name or ACN in constructing the website and in transmitting other electronic data interchanges.
However, documents which are accessible through a website or which are dispatched via email and which are reasonably likely to be printed and used independently of the website or email should be prepared in a manner which complies with the requirements for physical documents referred to above. The circumstances could amount to a situation where ASIC considers that the communication of the of participants is inadequate if full names, ACN (or ABN in many cases) as well as addresses are not shown.
[1] Australian Securities and Investments Commission, Regulatory Guide 13 (at 7 August 1995) rg 13.38.
|
David Perkins
Consultant Bradfield & Scott Lawyers Telephone: 9233 7299 Email: dperkins@bradscott.com.au |
