The ASIC National Business Name Register has been described as “a nightmare” by small business owners, who have raised concerns about the difficulty of transferring a business name and with privacy for home-based businesses.
Lyn Prowse-Bishop, owner of Executive Stress Office Support, told SmartCompany she recently tried to transfer a business name as she was selling a business and transferring to someone else.
She says under the previous state-based registration system this would have required filling out a simple transfer of business name form.
“Now I had to do it through the ASIC site and had no end of trouble with it. It ended up turning out that I had to cancel the business name registration and during the 30-day period it was held in abeyance the new owner had to whip in and grab it before anyone else did,” says Prowse-Bishop.
She says her business had issues communicating with ASIC staff and with the system itself – which went down at one stage. She had to send multiple emails and make multiple attempts to transfer the name via the website.
“The records for the business still haven’t been updated. It won’t be until the end of July and the whole thing has just been a nightmare,” she says.
Prowse-Bishop also says she is concerned about breaches of privacy with the ASIC website as personal address details of business owners are appearing on the website.
“Home-based businesses are not supposed to put our home addresses to be publicly available because of the security issues, so most use a PO box,” she says.
“Under the ASIC system, it says on the site that a physical or street address is needed and if you use your home address for service of documents, it will be displayed on the register.”
Peter Strong, executive director of the Council of Small Business Australia, told SmartCompany the council had received complaints from business owners about the name register and had been in contact with ASIC to try to resolve businesses’ concerns.
“The issues have continued since changeover from state-based registration to ASIC, it’s been a couple of months now,” says Strong.
“There are issues with the sales of business names, as when you sell your business name to someone you can’t just pass it over. You have to deregister it and the other person has to then go in and register it; that leaves an opportunity for someone to take it in the meantime.”
Strong says the requirement for home-based businesses to include their personal address on the register is also of concern to COSBOA.
“That was something ASIC didn’t foresee and they have to address that. So we have told them about it as that is a concern for privacy, especially for women working from home.”
CPA Australia business policy adviser Gavan Ord told SmartCompany the ASIC register was frustrating new, small business owners, “which is not a good start to their business”.
Ord says home-based businesses could address privacy concerns by using their accountant’s address, but this would incur a fee and so would increase the cost of starting up a business.
“From our point of view, the business names registration transferring from states to Commonwealth is a good reform. Our concern is if ASIC has trouble implementing the reform, some of the states will question other more important reforms and whether the Commonwealth can deliver,” he says.
“It is important if these are teething issues that they are dealt with quickly. We don’t want this held up as a reason not to pursue reforms around competitiveness and better regulation.”
A spokesperson for ASIC told SmartCompany that it was working to rectify some of the issues businesses had raised.
“We are aware there have been various issues. We are in constant communication via our website, we are experiencing high demands: 32,000 applications in the first seven weeks and 900 applications each business day,” she says.
She says the legislation creating the National Business Names Register requires the 28-day lag time in transferring a business name.
“Under the new laws, there is a change in the policy to wait 28 days to cancel a business name and then transfer it,” the spokesperson says.
The requirement for a physical address to be listed for home-based businesses is a matter of balancing competing needs for ASIC.
“There must be at least one physical address on the business name register. If people are operating a business from home, I guess that is one of the issues that arise from operating in that way,” the spokesperson says.
“A PO box is not sufficient. It’s a balance between the privacy of the business owner and ensuring the people they are dealing with are able to access them and have confidence in the way they are operating.”
