What is a Caveat?18 June 2021
Using ‘Ltd’ ‘Limited’, ‘No Liability’ ‘Pty’ or ‘Proprietary’ in a name
You often see or hear terms ‘Pty’ and ‘Ltd’ at the end of a business name, but do they actually mean?
What is the difference between a company and a business?
A company is a legal entity distinct from its owners and directors. A business is a way of making money.
You do not have to form a company to run a business. Many people work and earn money without having a registered company.
How do I know if it is a company or a business?
When ASIC registers a company, it gives it a nine-digit number called an Australian Company Number (ACN). This number identifies the company.
You can also register a business name with ASIC – but to do so, you must first obtain an 11-digit Australian Business Number (ABN). You can apply online for an ABN through the Australian Business Register.
A company or a business must display its ACN or ABN on documents such as letters and invoices. A company’s ABN can be used in place of its ACN if the last nine digits of its ABN are the same and in the same order as its nine-digit ACN.
Some company owners choose to include a company’s ACN or ABN as part of its name, which ensures that whenever the name is displayed the ACN or ABN is also displayed.
If a company’s ACN is not used in its name then the words ‘Australian Company Number’ or ‘ACN’ and the company’s nine-digit ACN or 11-digit ABN must be included for the purpose of indentifying the company – for example, ‘Generic Company, ACN 111 222 333’.
When can an entity use certain words (e.g. ‘Pty Ltd’)?
A registered company must include the words ‘Limited’, ‘No Liability’ or ‘Proprietary’ in its name, depending on what type of company it is. These words are sometimes abbreviated to ‘Ltd’, ‘NL’ or ‘Pty’ (or ‘Pty Ltd’).
Registering a business is not the same as registering a company. If you are operating a registered business that is not also a registered company, you are not allowed to use these words in its name.
What you should do
If you are unsure about the use of these words in a name, there are a number of options available to you.
Contact the business
A registered company or business can provide you with the correct spelling of its name and its ACN or ABN.
Registered company and business names are listed on ASIC’s registers at ASIC Connect.
Seek legal advice
We recommend you talk to our legal advice to discuss use of these words in a name or if you need more assistance.