Enterprise Law

Unit 700254

Topic 2: Business Structures (part II)

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Topic Outcomes
On completion of Topic 2 (part II), you should be able to:
◦ Outline the reasons for and importance of registering a business
name
◦ Explain the legal restrictions imposed on the use of a business
name
◦ Understand the three elements of a Partnership
◦ Explain the considerations for entering a lease
◦ Outline the following types of intellectual property (IP)
◦ Trademark
◦ Copyright
◦ Patents

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 Business Names
 Registration of a business name is required in all jurisdictions by business
names legislation where the owner/s do not use their own name(s) or
company name.
 Can check availability and register with ASIC.
An application will be refused if:
 The name is already registered in the state or territory
 The name is similar to a name already registered in the state or
territory
 The name has already been registered as a company name
 Upon registration, the name is not “owned” but may be used for
the period of registration

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Business Names
The purpose of registration includes:
◦ Virtual monopoly rights on registration (but no proprietary right);
◦ Identification of the owners;
◦ Avoiding confusion by preventing similar or identical names being
registered; and
◦ Provision of a public registry where information concerning the
registered business can be accessed.

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Elements of a Partnership
 The Partnership Act 1892 (NSW), s1(1) tells us a partnership is

‘… the relation which exists between persons carrying on a

business in common with a view of profit …’.
 Statements by the parties that they are or are not partners are not
conclusive
 Three elements of a Partnership
 Carrying on a business
 In common
 With a view of profit

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Elements of a Partnership
(1) Carrying on a business
 In the past the courts have made a strong
distinction between one-off enterprises and
ongoing activity, however, today courts tend to
take a more flexible approach
 Preparatory work:
 compare Khan v Miah (2000) and Keith Spicer v
Mansell (1970)

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Elements of a Partnership
Khan v Miah (2000)
 Khan and Miah agreed to be partners in a restaurant business
 Khan had provided funding for the project and was closely
involved in the planning and acquisition of premises,
purchasing furniture and setting up a bank account
 Prior to opening there was a falling out and the men ended
their relationship
 Held: Khan was a partner

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Elements of a Partnership
Keith Spicer v Mansell (1970)
 Bishop and Spicer intended to form a company to run a
restaurant
 They didn’t end up starting a company and the restaurant
never opened
 Dispute arose as to liability to pay for furniture
 Issue for the court was whether Spicer and Bishop were
partners
 Held that the parties’ arrangement didn't satisfy the ‘carrying
on’ requirement

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Elements of a Partnership
(2) In Common
 Requires consideration of whether potential partners
are carrying on the same business or two related, yet
separate businesses.
 A strong indication is whether they both experience
the same losses/gains
 See: Taxicab Co Ltd v Stone [1930] and Degiorgio v
Dunn [2004]

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Elements of a Partnership
 Taxicab Co Ltd v Stone [1930]
 Owner of a taxi hired it to another on the basis that
they would get a share of the day’s takings
 Issue for the court was whether owner and driver
were carrying on a business ‘in common’ for the
purpose of the Act
 Held that there were two separate businesses being
carried on, running side-by-side

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Elements of a Partnership
Degiorgio v Dunn [2004]
 An AC/DC tribute band was operating as a partnership
 The band broke up, dissolving the partnership
 Dunn decided to form a new band and asked Degiorgio to join
 Degiorgio chose to be paid a fixed fee for each performance and
was away for an extended period soon after formation and after
returning attempted to ‘poach’ band members for another new
tribute band.
 Degiorgio brought an action claiming a share of the profits
 Held that he was not a partner as he was not carrying on a business
‘in common’ with the other members of the band.

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Elements of a Partnership
(3) a view of profit
 Not a requirement to actually make a profit
 Intended to exclude religious / sporting / charitable
groups

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Leasing a Premises
 Lessee: person who holds the lease (tenant)

 Lessor: person who leases the property to another (landlord)

 A well executed lease can have significant benefits to a

business both while running and when selling.
 Costs: lease preparation, bond, rent, outgoings, fit-out

 What are some the terms that should be included in a lease?

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Leasing a Premises
 In NSW, the Retail Leases Act 1994 (NSW) (the Act)
governs leases for shops (up to 1,000 m2) selling or
supplying goods or services, as part of a retail business
 Resolving disputes: The Act requires the parties
attempt mediation, provided by the Registrar of Retail
Tenancy Disputes in the Office of the NSW Small
Business Commissioner (charged to both lessor/lessee)
 If unsuccessful, the dispute will go to the NSW Civil and
Administrative Tribunal (NCAT)

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Leasing vs Purchasing Premises
The advantages of purchasing real property (rather than leasing) include:
• Property becomes a business asset.
• There is security of tenure (owners cannot be evicted).

The advantages of leasing real property include:

• Flexibility to move to a different premises at the end of the lease
term.
• Initial costs are significantly lower.

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Intellectual Property

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Intellectual Property
Definition: a form of intangible property derived from original creative thought.
 Intangible property protects rights rather than a physical object or land.
 Why does the law provide protection to IP?
 The registration of IP is managed by the Federal body IP Australia.
 We will consider the following three types of IP:
 Trademark
 Copyright
 Patent
 Other types include: Designs, Plant Breeders’ Rights (PBR) and Circuit
Layouts

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Intellectual Property
Trademarks

 Examples: covers branding, includes, words, sound,

smell, shape, logo etc
 Protecting colours using trademarks
 Governed by Trade Marks Act 1995 (Cth)
 Requires registration with IP Australia
 Period of 10 years, renewable indefinitely, provided the
trade mark is used and the fee is paid

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Intellectual Property
Copyright
 Examples: songs, literary works, films
 Governed by Copyright Act 1968 (Cth)
 Automatic protection upon creation
 Period: 70 years from death of author or from first
publication (after death)

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Intellectual Property
Patents
 Examples: inventions - appliances, mechanical devices,
computer software, business methods
 Governed by Patents Act 1990 (Cth)
 Must be new and useful
 Requires registration with IP Australia
 Two types: Standard (must show an inventive step), and
Innovative (show innovative step)
 Standard (20 years), Innovative (8 years)

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