Starting a new business for the first time can be a daunting and confusing process, as some of the concepts and terminology will be entirely new. Some new business owners are not aware at the outset that a company is actually distinct from a business.
Here are some important things to know when starting a new business:
What is the difference between an ACN, ABN and a Business Name?
An ACN is an Australian Company Number and is the designation given to a company by the Australian Security and Investments Commission (ASIC). This number is provided to you at the time of incorporation and unlike the name of the company, it will never change.
An ABN is an Australian Business Number. Any entity that will be collecting GST, whether it is a person or a company, will need to apply for an ABN before they begin trading. This applies particularly if they do not want to have to wait for their tax return to recoup the tax withheld on payments made to your business which could be up to 47%.
Business names, or trading names, may be registered to an entity and are allocated a reference code typically beginning with ‘BN’. It is important to make sure that you have registered your business name in order to ensure that no other entity can do so.
Is your trading name registered?
If you are trading or operating your business under a different name to your legal entity then you will need to register your business name. For example, if John Smith was operating a business under the name “John’s Quality Shoes”, then the business name “John’s Quality Shoes” would need to be registered to John Smith’s ABN.
Business names can be transferred between entities, which is what will happen if you sell your business to another entity. This process is done online using the ASIC website, so you will need to hold onto your ASIC key so that you can log in.
What is a trademark?
A trade mark is an image, colour, word, sound, or smell that is distinct to the goods and services that you as a business provide. Two examples might be the Cadbury purple or the Nike tick logo. Once a trademark has been registered, your business will be afforded significant legal protection in respect to that trademark.
There are, however, strict requirements regarding what will be allowable as a trademark. You will need to ensure that your trade mark application meets these requirements before lodging.
How we can help
If you need assistance in setting up a business, registering a trademark, or need advice on the legal aspects of running a business, do not hesitate to contact our office.