Explanatory Memorandum
(Circulated by the authority of the Minister for Small Business, Minister Assisting on Deregulation and Public Sector Superannuation, Minister Assisting the Minister for Tourism, Senator the Hon Nick Sherry)Chapter 11 General
Outline of chapter
11.1 Chapter 10 of this explanatory memorandum outlines:
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- a number of general provisions necessary to ensure the proper operation of the Bill.
Detailed explanation of new law
11.2 Subsection 81(1) provides that any obligation that would be imposed on a partnership under this Bill or the Transitional Bill, is an obligation imposed on each partner, but the obligation may be discharged by any of the partners. Pursuant to subsection 81(2), one or more of the partners in a partnership may cause any act that is allowed or needed under the business names legislation to be done on behalf of the partnership. If the partnership commits an offence under the Bill, each partner is taken to have committed the offence. A partner does not however commit an offence if they are not aware of the circumstances that led to the offence or, if they are aware, they take all reasonable steps to correct the breach immediately after they are aware of the circumstances. The onus of proof to demonstrate that the partner was not aware or, if they were aware, that they took reasonable steps rests with the partner who would be a defendant in any proceedings
11.3 Section 82 provides that all partners in a partnership can nominate a person as a principal contact for the partnership for the purposes of the Bill or the Transitional Bill. The person nominated is taken to be the agent of the partnership in respect of dealings with ASIC in respect of the Register, until their nomination is withdrawn by all partners by a notice in the prescribed form and manner under subsection 82(4). Pursuant to subsection 82(3), a change in the composition of the partnership does not affect a person's nomination. Thus if the composition of the partnership does change, it is not necessary for the partners to nominate a new principal contact.
11.4 Sections 83 and 84 contain similar obligations for unincorporated associations or bodies to those that are imposed on partnerships in section 81 and 82.
11.5 Sections 85 and 86 contain similar obligations for trustees to those that are imposed on partnerships in section 81 and 82.
11.6 Section 87 provides that, for the purposes of the Bill and the Transitional Bill, two or more entities that contract to carry on a business under a business name, without forming a new entity, are taken for the purposes of the Bill and the Transitional Bill to be a single entity, being a joint venture. An obligation imposed on the joint venture is imposed on each joint venture entity but can be discharged by one of them on behalf of any of them. Similar provisions that apply to partnerships also apply to joint ventures in that if a joint venture entity can establish that it was not aware of the circumstances that constitute a breach, or alternatively that it took all reasonable steps to correct the breach, the joint venture entity will not be liable. Under subsection 87(6), joint venture entities may nominate a person as the principal contact for the joint venture, who will act as the joint venture's agent for the purposes of the Bill and the Transitional Bill, until their nomination is withdrawn. If all the joint venture entities wish to withdraw the person's nomination, they can lodge a notice with ASIC in the prescribed form and manner. In relation to an application for the registration of a business name to a joint venture entity, each joint venture entity must provide a copy of their ABN or a statement that they have applied for an ABN and the reference number for the application for the ABN. ASIC cannot register the business name to the joint venture unless each of the joint venture entities has an ABN. The priority that a joint venture has over a business name, which it has applied for, is not affected by an ABN application being pending. If a joint venture entity is an individual, and they die, the business name remains registered to the joint venture. Sections 39 and 40 of the Bill will apply to the death of the joint venture entity like they do to an individual who has died and has a business name registered to them.
11.7 Section 88 applies the business names regime to the territories of Christmas Island and Cocos (Keeling) Islands. Necessary modifications are made to the definition of 'business'. Exceptions to the requirement that an entity have (or have applied for) an ABN are also made for this purpose, to the extent provided by this provision.
11.8 Section 89 provides for the giving of notice under the Bill where the relevant entity has ceased to exist. The regulations may provide that a notice is taken to have been given to the entity if a person described in the regulations is given a notice instead. For example, it is intended that the regulations will provide for notice to be given to a company that had been deregistered following the completion of a winding up by giving notice to the person who was the liquidator of the company immediately prior to deregistration occurring.
11.9 Section 90 provides that the Governor-General may make regulations prescribing matters that are required or permitted by this Bill to be prescribed or are matters that are necessary or convenient to be prescribed for carrying out or giving effect to this Bill.
Application and transitional provisions
11.10 All provisions in Part 10 will commence on a single day to be fixed by proclamation. The date of proclamation will depend on when the final State or Territory passes its referral legislation or adopts the Commonwealth legislation.
11.11 Transitional provisions are contained in the Business Names Registration (Transitional and Consequential Provisions) Bill 2011.
Consequential amendments
11.12 Consequential provisions are contained in the Business Names Registration (Transitional and Consequential Provisions) Bill 2011.