BUSINESS NAMES (COMMONWEALTH POWERS) BILL 2011 – Thursday, 8 Dec 2011

Posted on 14. Dec, 2011 in Speeches

Mr LIM (Clayton) — I am pleased to speak on the Business Names (Commonwealth Powers) Bill 2011. This bill should hopefully be business friendly. I am amazed that no previous speaker has been prepared to acknowledge that this bill completes the process commenced under the previous Labor government to transfer the responsibility for registration of business names from each individual state to the commonwealth under a single national system of registration. In a sense it follows on from a process started 110 years ago with Federation, which provided for free trade between the states. However, it is the work done between the states and the commonwealth government in more recent years to harmonise laws and establish national registers that has led to this initiative.

Registering a business name is very important for small and micro businesses. Simply using one’s own name does not say much about a business. While your name might be Smith, it is likely that your family has not been in the blacksmith business for generations or even a few centuries. A person with the surname Baker might bake bread but probably does not. Registration of a business name is not only effective in promoting one’s business but also much cheaper for a small or sole trader than forming a company and meeting all the regulatory compliance. Of course if one attaches a description of the business to the name, then business name registration becomes mandatory.

The advantage for businesses in moving to a system of single national registration is that if they trade in a number of states, they will not have to register in every state. One national registration will suffice. If businesses also need an Australian business number (ABN) — and that will become compulsory — there will be a one‑stop shop for them to apply for that. Previously businesses have applied for business name registration in their state and obtained their ABN from the commonwealth government.

In legislating for the transfer to national business name registration, the bill before the house repeals the Victorian Business Names Act 1962. Clause 1 of this bill adopts the commonwealth Business Names Registration Act 2011 and the commonwealth Business Names Registration (Transitional and Consequential Provisions) Act 2011. However, there are a couple of issues for Victorian businesses which I have to point out. The minister in his statement of compatibility preceding his second‑reading speech said that the transfer to the national system will significantly reduce fees associated with registering business names, and the previous speaker also alluded to that. But that is not true — certainly not for Victorian businesses renewing their business names. They currently pay $61.10 to Consumer Affairs Victoria, but it is proposed that they will pay $70 for renewal at the national level, an increase of a whopping 14.5 per cent.

The search engine Google generates its income from paid advertising. It promotes businesses by providing predicted searches in the search box and by results appearing as a person types in their query. Companies pay for prominent listings with Google. If prospective businesses perform a Google search for the term ‘national business names registration’, the first result they see will be www.businessregistration.com.au, which is the business division of Business Switch Pty Ltd. This is not a government agency; it is a private company that will of course charge for services. I find it regrettable that it has been allowed to register such an official‑sounding and therefore misleading domain name. Perhaps the minister would care to have his department look into this matter.

In the meantime a business wanting to register a name should register through Consumer Affairs Victoria until the transfer is complete. Following the transfer, business names registration will be managed and administered by the Australian Securities and Investments Commission. There is a grandfather clause relating to identical business names in various states, so it would be okay if the name Lim Aeronautics is already registered in both New South Wales and Victoria; ASIC will differentiate between them by putting ‘Melbourne’ or ‘Sydney’ in brackets after the name. However, if the name Lim Skydiving is already registered in Melbourne, then after the national transfer a New South Wales business will not be permitted to register the same name.

Victorians considering registering a business name and facing the possibility of there being an identical name interstate should consider acting now. Likewise, businesses need to be aware that it will be compulsory to obtain an ABN if they register a business name after the transfer to national registration. All in all, this bill, which will complete the work of the previous state Labor government, is business friendly. I wish the bill well and a speedy passage.

 

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