How do company names work

Discussion in 'Business Accounting, Tax & Legal' started by bob shovel, 9th Oct, 2016.

Join Australia's most dynamic and respected property investment community
  1. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,936
    Location:
    Lower Blue Mountains
    Hi business gurus!

    I have a very basic and probably simple question but its all new to me so I'm happy to look silly:D

    How do company names work? Business names and trading as names?? What's the simple explanation?

    I'm looking to start a business - sole trader to begin with but i haven't thought of a cool, intelligent, original name yet :). Can i set up a company with a default name to get the ball rolling and an abn etc so i can start working and then think of the cool name later? (Not to late, say 6 months)

    I did a quick Google and from my brief look trading as names need to be registered now. Were you previously able to set up "company x" then have a fancy name to use for clients?

    Does it mean that now you need to have the cool name from the get go to match the abn number and be registered etc etc?

    Very noob question but basically i want the abn set up to be able to start working and invoice people :D, then as i get more work and find that area i want to target choose the fancy name to suit and grow from there

    Thanks in advance
     
  2. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,936
    Location:
    Lower Blue Mountains
    Sorry this is probably general business chat :)
    Noob central here
     
  3. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    4,579
    Location:
    Sydney
    You can operate as a sole trader using your own name without registering a business name.

    Sole trader

    You can then later register a business name when you're ready.

    How to register a business name for the first time if the holder is an individual

    Operating as a sole trader is the quickest and cheapest way to get started, but offers you zero protection in case things go wrong and very little flexibility if things go right.

    How big are you intending your business to grow? You may be better off starting with the end in mind and getting a proper structure set up now?
     
  4. CO2

    CO2 Member

    Joined:
    3rd Oct, 2016
    Posts:
    6
    Location:
    Brisbane
    I wonder if the name really matters as well.

    Plenty of successful companies out there with peculiar company names not relating to the industry

    e.g. Apple, heinz, macdonalds, johnson and johnson

    when you study the name in isolation it really means nothing to the product

    I have been thinking about a company name for months, but I think it doesn't really matter so much
     
  5. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    4,579
    Location:
    Sydney
    In my experience, far too much time gets wasted by people getting caught up trying to find the perfect name.

    I know I've spend months helping my clients search names and find available domain names - and I've been guilty of this myself too.

    That being said, with BusinessChat, I was after a specific name and wasn't happy with any of the alternatives I tried. I am very happy I managed to acquire the domain name that I did!

    However, propertychat.com.au was a domain name I actually registered a while back without originally intending to use it. I thought it was too boring / lame. Turns out it's the perfect name for what I was trying to build, but I couldn't see it at the time.

    Similarly, I spent quite a bit of time on the rebranding of InvestEd, new logo, new colour scheme, had even completed the first version of the new website - but then decided we needed to change the name as well. Again, I originally dismissed investchat.com.au as too boring, but later realised it was actually the perfect name for the site. Once again, I was fortunate I already had it registered!

    I think names are far less important than we'd generally like to think they are. At the end of the day, the best name in the world won't save you if you don't have a product or service that your customers want or need. I think the only thing to be careful of is:

    A) name clashes - make sure your customers won't get confused by who you are (or mistake your competitors for you!)
    B) misleading names - makes sure your customers aren't mislead about what you do
    C) trademark issues
    D) inappropriate names - make sure your name can't be misinterpreted in an inappropriate way or cause offence to people

    ... and of course, don't choose a name until you've checked an appropriate domain name is available.
     
  6. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,936
    Location:
    Lower Blue Mountains
    Thanks @CO2 and @Simon Hampel !

    I have spoken to my accountant for advice and with the way I'm planning to go about it he suggested sole trader then adjust as it grows. The first 2 years I'm using to get out there and do a "bit of everything" and get skilled up and licenced. Then i can find my niche and look to employ contractors etc and have some $behind the company.

    The name is something i don't want to hold me back, i want to be out there and let my work help find a name. I don't want to go for a generic "bob the handyman" or "bobs renovations" because every man and his dog has those generic names i want it to be a unique name and stand out like the ones co2 mentioned, they are all house hold names but nothing to do with the service/product. ...but in saying i will keep it in line to some degree i think. Most of all i don't want to spend time in thinking of a name i want that to evolve.
     
  7. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,936
    Location:
    Lower Blue Mountains
    Ok so turns out i already have an ABN! :oops:
    In 2011 i tried to set one up but after trying i vaguely recall being knocked back and i left it at that thinking it was denied. Turns out it was established. ...would have been handy at the time! (The cash in hand was no problem though;) )

    So now I'll set up a bank account and give xero a trial and likely sign up with them.

    I've found a training course so i can get started spending:D
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    23,181
    Location:
    Australia wide
    Bob, I wouldn't start off as a sole trader, especially if you are going to be employing people and entering contracts - it is too risky. There are also tax issues on transferring the business to a company as well as asset protection issues.

    There are also various tax strategies with setting up a company. e.g. You cannot employ yourself but a company can. If in the first year there is no profit and you have no other income your company could pay you a wage - say $20k. You will pay no tax on this, but the company can claim it as a deduction.

    I suggest you start off with a company. You can use the ACN as the name until you think of one and then just fill in a form and send off to ASIC to change the name. Or you can keep the existing name and just apply for a trading name.
     
  9. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,936
    Location:
    Lower Blue Mountains
    Hmm very interesting thanks Terry!

    I did run through my accountant with the plan but he suggested sole trader then upgrade as needed.

    A friend who started a handyman business went through similar and said to go to company straight away.

    The first 12 months will be likely solo as i will likely be restricted til i get a couple of courses under my belt.
    Can sole traders engage subcontractors? I thought this would be a year or two away but i may be able to fast track some studies and RPL
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    23,181
    Location:
    Australia wide
    Yes a sole trader can engage subcontractors = you contracting with them.
     
  11. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

    Joined:
    12th Jul, 2015
    Posts:
    1,899
    Location:
    Melbourne, Australia
    Hi @bob shovel

    If you choose to go the company route, you will need to register a company (eg ABCD Pty Ltd). If you wish you can also register a business name (formerly known as trading name). Let's say you decide to do this. So for bank account purposes you'd be ABCD Pty Ltd trading as Awesome New Business. Your website and shop signage could read "Awesome New Business". However without the business name registered it'd have to be "ABCD Pty Ltd".

    If you are planning to have a website and you want to maximise traffic, it's ideal if your trading name is also your domain name. So take a peek if that is available first.