Transfer of Business Names
Transfer of Business Names – the new rules
As we advised our readers in our April Newsletter, ASIC is now responsible for the administration of a national register of business names – a change from the long serving system of management administered by individual State and Territory Government departments (such as the Department of Fair Trading in NSW).
Under the old regime, a transfer of business name in NSW was as simple as completing a Form 6, application to change proprietors of a business name. If the business name was being transferred as part of a business sale, the usual course of events was to hand over a signed Form 6 on completion to allow the Purchaser to lodge the form.
What has changed?
ASIC now requires the following process to take place in order to effectively transfer a business name:
- The registered proprietor of the business name must first obtain an ASIC key. This is not the same thing as a company’s corporate key. To obtain the ASIC key the proprietor must have either registered its business name or received a business name renewal form after 28 May 2012, or it must establish an ASIC Connect Account in an individual’s name and then link the business name to that account. From here an ASIC key can be requested. It will not be generated immediately but will be posted to the address for service linked to the business name.
- The proprietor must then lodge online a “maintenance smart form”, which allows proprietors to amend details attaching to their business name registration – similar to the idea of the form 484 for companies. Your ASIC key will be required for this form.
- The above form will allow a proprietor to choose “cancel or transfer a business name”.
- The lodgement of this maintenance smart form will generate a unique “consent to transfer number” which will be sent to the proprietor at the address for service linked to the business name. The generation of this number effectively cancels the business name and holds it open for a period of 4 months. During this time only a person holding the consent to transfer number can re-register the name.
- The consent to transfer number can then be handed over to the proposed transferee. The proposed transferee should then lodge their own application to register a business name (using the consent to transfer number obtained by the existing registered proprietor of the name).
Note that ASIC will need 28 clear days from the date of notification of a transfer before it will accept an application to register the name by a proposed purchaser. However a proposed purchaser can commence trading under the business name (and for a period of 3 months) as soon as it has lodged its application to register the business name.
The new process appears more cumbersome than its predecessor in NSW. This is attributable in part to the requirement to set up the ASIC Connect account and to obtain an ASIC key, both of which will only need to be done once.
If you require any further information on the topic, please call Tim Osborn on 02 4925 2077.