How to Transfer a Business Name From a Sole Trader to a Company (2020 Update)
Have a great business name as a sole trader, but want to carry it over to your new company? Read this guide to find out how to transfer your business name.
Have you recently decided to register a company? Do you have an existing registered business name under your sole trader ABN? Having the right name for your business is crucial. But what happens when you have the perfect name as a sole trader, but have decided to register your business as a company? Running a successful business likely means that you have a great name to match. In this article, we’ll discuss how to transfer a business name to a company.
Sole traders may wish to change to a company structure for a number of reasons. Perhaps your business has grown enough that it should be incorporated, or you’re paying too much tax through your ABN. Corporate tax rates can be more appealing for business owners, especially where the business is making a good profit. Further, registering a company means that you won’t be legally responsible for any debts your business incurs. To register a company, you will need to register it online along with your company name, and cancel your old ABN.
What happens to my ABN?
When you register a company, you will also be allocated a fresh ABN. Your sole trader ABN will remain on the ATO register, but it is worth canceling if you will no longer be using it.
Carrying over your business name
When you register a company, you also get to register a name for it. If your official company name is going to be the same as your previously registered business name, it may not be worth carrying the business name over. However, if you wish to register this name in addition to your company name, then you will have to transfer it. If your business has recently changed from a sole trader structure into a company structure, any existing name registrations under your ABN as a sole trader will remain under this structure. Your business name will continue to be registered under your ABN – that is unless you change it.
To retain ownership of the names under your ABN, you will need to transfer your business name from your sole trader ABN to your company ABN. This can be easily done on the ASIC website and involves a two-step process.
How to Transfer a Business Name from a Sole Trader to a Company
1. Preparing Your Business Name to be Transferred
To authorise the transfer of the business name you will need to log into ASIC Connect and link your business name to your account, if you haven’t already done so. You can also login with your AUSkey. Once logged in, you must select the option to ‘Cancel/Transfer business name’.
Once confirmed, this will generate a secure 13 character transfer number (e.g. 1-12347564652), which will be sent to your email address. The transfer number is valid for four months.
2. Registering your business name to the new ABN
After your receive the transfer number you will need to log into the ASIC Connect account for your new company. In the Licences and Registrations tab, select the option to register a business name. To find your business name you must enter it exactly how it is listed in the ASIC register.
Unfortunately, the registration period of your business name will not carry over, so you will need to select a new registration period.
Louis is a legal intern at Lawpath who is working with the content team to provide accessible guides to legal issues. With an interest in contract and media law, he is completing his Bachelor of Communications and Laws at the University of Technology Sydney.