What’s in a Name?
Australian businesses get creative with names, but using “charity” or “charitable” requires legal proof of charity status. Consequences exist for misuse.
Soapranos laundry shop; Wok This Way noodle restaurant; Ones & Twos plumbing; Shot, Framed and Hung photography; Mid-Life Cycles motorcycle repairs; and Curl up n Dye hairdresser. These are just a few business names around town that reflect how truly creative, funny and inventive Australians can be. It seems that there is no limit on what Australians can choose to call their business.
However, if you have not examined Part 1 of Schedule 2 of the Business Names Registration (Availability of Names) Determination 2015 (Cth) in great depth, you could be in trouble. A close analysis will reveal that, amongst other words, ‘charity’ and ‘charitable’ are restricted and cannot be used by business in their company or business names if they are not actually ‘charities’ or ‘charitable’.
The Charities Act 2013 (Cth) discusses the meaning of a charity; an organization can be charitable if it is a not-for-profit entity and its purpose are charitable and for the public benefit.
A charitable purpose is further defined to mean any of the following: advancing health, advancing education, advancing social or public welfare, advancing religion, advancing culture, promoting reconciliation, mutual respect and tolerance between groups of individuals that are in Australia, promoting or protecting human rights, advancing the security or safety of Australia or the Australian public, preventing or relieving the suffering of animals, and advancing the natural environment.
Companies that are seeking to use ‘charity’ or ‘charitable’ in their company or business name must be able to demonstrate that they are charities in the legal sense. The safest way of doing so is via registration with the Australian Charities and Not-for-profits Commission (ACNC).
There can be serious consequences for a non-charitable company if it includes ‘charity’ or ‘charitable’ in its company or business name. Consequences can include ministerial sanction or ASIC deregistration. It can even include civil actions under consumer protection law for matters such as misleading and deceptive conduct, misleading representations or unconscionable conduct.
If you are a business owner or someone who is interested in running a charity or performing charitable activities, it is imperative that you think carefully about your activities and purposes before you choose a business or company name. If you are running a charity, the best way to protect yourself is to register as a charity with the ACNC.
Warlows lawyers are experts in registering charities with the ACNC and offering advice to charities, not-for-profits and all types of businesses. Contact us to enquire about how one of our charity lawyers can help.
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