Company name & Business name

Discussion in 'Business Accounting, Tax & Legal' started by qak, 17th Dec, 2018.

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  1. qak

    qak Well-Known Member

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    I'm trying to work out how to do this - I have a company name (let's say ABCDE Pty Ltd) but I would also like to personally use ABCDE as a business name.

    Reading the information from ASIC, it seems to be saying that the company can register the business name, but then needs to cancel the business name to transfer it to another person, which doesn't quite make sense to me.

    How else can I do this? Can the company licence me to use that name? How do chains like McDonalds have all different franchisees using the name McDonalds?
     
    qak, 17th Dec, 2018
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  2. Trainee

    Trainee Well-Known Member

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    Your company could license the name to you, but why would you want to use it personally?
     
    Trainee, 17th Dec, 2018
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  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    You need to differentiate between Brands, Business Names and Company Names.

    McDonald's is a brand owned by McDonald's Corporation in the US and presumably used under license by McDonald's Australia, which is the franchisor for most of the local McDonald's stores in Australia (and also runs some of its own - possibly under a different entity).

    Most restaurants are franchises which are operated by something like XYZ Pty Ltd trading as Some Brand

    The brand name will be used under license by the franchisee.

    This is relevant: The difference between a trading name, business name and company name | ASIC - Australian Securities and Investments Commission

    Brand names and Franchise names
    Many businesses have a brand name that is used by different entities. For example, ABC business may have ABC Operations, ABC Logistics, and ABC Security.

    Franchises and other business structures may provide a license to an entity to use a name. Each entity, including franchisees and licensees, operating with a business name must register the name on the Business Names Register.

    Registered business names may be distinguished by a word or phrase, e.g. ABC Operations and ABC Seymour. The word may be a suburb or town, a year, a colour, an entity name or another word relevant to the business.

    Names that are identical or nearly identical to an existing registered business name are not allowed.​
     
    Simon Hampel, 17th Dec, 2018
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  4. qak

    qak Well-Known Member

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    Because I'd rather operate my two businesses under the one "name" but not entity at this stage. Now I'm thinking to just merge it into the one entity next year. If I'd registered the business name first I think I would have been better off - could have then given permission to register the company.
     
    qak, 17th Dec, 2018
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    It can be VERY lucrative that you personally (or a separate entity) own the intellectual property over a brand. But then license it to a "sales" entity. Franchise it, license it, what ever you call it. And earn a fee separate to sales revenue. It means if the wheels fall off the wagon you personally own the brand IP (intellectual property). That entity can also own patents and other rights like trademarks and designs. The liquidator cant sell it. May assist the brand to survive and be sold off. This is the very concept behind Virgin Enterprises.

    But it can also complicate matters.. I would always recommend a discussion with a IP savvy lawyer. (I can recommend a specialist!) In its best form it may also assist that the IP is owned by one entity that earns a royalty / fee. Then there is a distribution entity and another that manufactures (+ R&D). It sells to the selling entity. All are firewalls. Agreements and licenses may be needed

    Names can actually be nearly identical to one registered BUT its asking for trouble. ASIC dont care. They only limit identical except if its a restricted name eg Bradman.... But lawyers will. The offended entity can argue "passing off" and seek injunctions and massive damages. eg I register a name called Coles Supermarkets (Thornleigh) Pty Ltd. ASIC allows that. Coles wont tolerate it even for a moment.

    Then there are trademarks. Breach them and it a worldwide hurt. Examples : Virgin Financial Pty Ltd. Or it could be a image like a tick (swoosh = Nike) or a series of parallel bars (Adidas). Or triangular shape chocolate. Expect a cease and desist letter and a day in court even if the name is available. The obvious owner will seek to enforce the rights to the Virgin Group, image, choc etc. However let say you register the name KensBuckie Fried Chicken Pty Ltd...And it uses a green image of a dude with a moustache.and goatie beard. PepsiCo will take it on in a court for passing off and trademark violations...And that before the product issues get included.
     
    Last edited: 17th Dec, 2018
    Paul@PAS, 17th Dec, 2018
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    you could register ABCDE (NSW) for example.
     
    Terry_w, 17th Dec, 2018
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  7. geoffw

    geoffw Moderator Staff Member

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    geoffw, 17th Dec, 2018
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  8. Stoffo

    Stoffo Well-Known Member

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    Not sure how you could actually have two business entities trading under the same name, let alone registered to a single director ?
    (sounds like a tax dodge by using the primary business to advertise/promote while the individual gets a personal gain)

    Maybe ZYXWQ trading as ABCDE

    I started out as Applied Maintenance Services, but quickly became sick and tired of writting out such a long name several times a day.....
    So registered MOWDIT under the same ACN/ABN
    Just a thought if you require an alternative trading name, as registering under the same ACN/ABN requires only one BAS and accounting (saving time and money).
     
    Stoffo, 17th Dec, 2018
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