by John Wojtowicz (Director - Law Central Legal)

Today we look at company names and the issues surrounding their use.

Registering a New Company

There are a few things you need to think about when choosing a name for a new company. Firstly the name must be available; that is, it cannot be identical to an existing company or business name, except for limited circumstances where the holder of the business name is a proposed director or member of the new company. Curiously, ASIC consider any name differentiated by an “S” on the end as also being identical. So, Morgan Pty Ltd is considered the same as Morgans Pty Ltd. Unfortunately, this is also the case for acronymns (even with the letters separated by spaces or full stops), so P E T Pty Ltd would likely be considered the same as Pets Pty Ltd.

There are only certain characters that can be used in a company name. Some examples include @, %, # or ().

Some phrases or words can only be used with the approval of a government minister, including “university”, “trust”, and “building society”.  Restricted terms, such as “Sir Donald Bradman” or “Made in Australia” require ministerial consent. You must write a letter asking for consent to use the name and pay an application fee of $1,233 (as at September 2019).

ASIC may refuse a name if it considers it offensive or if it suggests an illegal activity.

Limited or Ltd

What if your company name ends with “Limited”. Can you use the abbreviation “Ltd” or do you always need to use the full word “Limited”?

We need to look at the relevant sections of the Corporations Act 2001 (Cth)(“Corporations Act”) to get to the bottom of this issue.

Under section 148(2) of the Corporations Act, a limited company must use the word “Limited” in the company name.

Under section 149(1) of the Corporations Act it is permissible to abbreviate “Limited” to “Ltd” in a company name.

Section 149(1) also states that other abbreviations may be used, such as “Pty” instead of “Proprietary”; “Aust” instead of “Australian”; and “Co” or “Coy” instead of “Company”.

Using the Company Name: On Public Documents and Negotiable Instruments

When is a company required to use its full name and when is a company able to use a shortened version or a logo instead?

This is addressed by several sections of the Corporations Act. Section 153 of the Corporations Act states “A company must set out its name on all its public documents and negotiable instruments” (emphasis added).

A “Negotiable Instrument” is defined in section 9 of the Corporations Act as “negotiable instrument, in relation to a body corporate, means: a bill of exchange, promissory note, cheque or other negotiable instrument; or an indorsement on, or order in, a bill of exchange, promissory note, cheque or other negotiable instrument; or a letter of credit; of, or purporting to be issued or signed by or on behalf of, the body.”

A public document is defined by section 88A of the Corporations Act as:

   “88A Public document of a body corporate

   (1)   Subject to this section, public document, in relation to a body, means:

          (a)   an instrument of, or purporting to be signed, issued or published by or on behalf
                 of, the body that:

                  (i)   when signed, issued or published, is intended to be lodged or is required by or
                        under this Act or the ASIC Act to be lodged; or

                  (ii)   is signed, issued or published under or for the purposes of this Act, the ASIC
                         Act or any other Australian law; or

          (b)   an instrument of, or purporting to be signed or issued by or on behalf of, the body
                  that is signed or issued in the course of, or for the purposes of, a particular
                  transaction or dealing; or

          (c)   without limiting paragraph (a) or (b), a business letter, statement of account,
                  invoice, receipt, order for goods, order for services or official notice of, or
                  purporting to be signed or issued by or on behalf of, the body.

   (2)   A thing is not a public document of a body if it:

          (a)   is applied, or is intended or required to be applied:

                  (i)   to goods; or

                  (ii)   to a package, label, reel or thing in or with which goods are, or are to be,
                         supplied; and

          (b)   is so applied, or is intended or required to be so applied, for a purpose connected
                  with the supply of the goods.”

ASIC, in Regulatory Guide 13 (“RG13”), offers some guidance as to the use of an ACN, Australian Registered Body Number and company names. RG13 at paragraph RG 13.19 states: “Whether any particular document is a ‘business letter, statement of account, invoice, receipt, order for goods, order for services or official notice’ is a question of fact” and offers some guidance as to ASIC’s view on categories of documents.

Using the Company Name: Outside Premises

Under section 144(1) of the Corporations Act, a company must display its name prominently at every place at which the company carries on business and that is open to the public.

Under section 144(2) of the Corporations Act a public company must also display its name and the words “Registered Office” prominently at its registered office.

Using the Company Name: On the Common Seal of the Company

Under sections 123 and 153 of the Corporations Act, if a company has a common seal, then the company is required to have the full company name in the common seal for the company. 

Section 149(1) states that the abbreviation of “Australian Company Number” to “ACN” is acceptable.

Using the Company Name: On other Material

There is no general obligation for a company to use the full company name. Set out above are specified documents and circumstances when the company must use the full company name. If you wish to reference the company on material which does not fall within those specified documents and circumstances then it will generally be permissible to use a shortened version of the name or a logo. If a shortened version of the name or a logo is permissible, then the shortened version of the name or logo is not required to contain the word, for example, “Limited” or the abbreviation “Ltd”.

We note that a shortened name or logo may be used in addition to the company name on a document which requires the use of the company name. It is not uncommon for public documents of a company to feature the company’s full name on the document but for the public document to also feature the company’s logo which does not contain “Pty Ltd” or “Ltd”.

Platinum and Gold members read on for a case summary under earlier legislation to see whether not using your company name invalidates a contract.

Disclaimer: The content of this Bulletin is general information only. It is not legal advice. Law Central Legal recommends you seek professional advice before taking any action based on the content of this Bulletin.