This week I received a phone call from a client in a panic – she has been trading under a name for years and has built up considerable goodwill however now a competing business was using that name and taking her business. The first question I asked her was – “do you have a registered business name?”
If your business is using a trading name (also known as a business name) that is different to its legal entity name, you must register it. Not only is this a legal requirement, but it is also necessary to protect the goodwill of your business. If you do not register your trading name, someone else can register it and then use it for their own business. This could mean losing customers/clients because they are mistaking someone else’s business for your business. In my client’s instance, the competitor was using her trading name on their website which was diverting many people away from her business as they mistakenly thought the website was for her business.
Registering your trading name is a good place to start as it identifies your business and connects it to your ABN. If you are a sole trader, partnership, or trust you will have to register your business name with ASIC. If you are a company that is trading as the same name as your entity, there is no need to register it. The registration of your trading name applies nationally so you do not need to register it in different states.
Unfortunately for my client, she did not have a registered trading name and therefore if her competitor registers it before she does, it will be a difficult road to proving she was using the name first. This is the last kind of problem you want to have with your business so make sure you register your business name today.
If you are thinking of registering your trading name or you are not sure if you need to, you should pick up the phone and call us because all it will cost you is your time. I will give you complete peace of mind by providing you with a fixed price to attend to whatever work is required to be undertaken.
