Tag Archives: ASIC

Registry Australia Scam

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We normally associate scams with an overseas entity randomly targeting you when we think of scams. Still, Registry Australia is an Australian company mining real data from ASIC. The Registry Australia scam encourages you to pay twice as much to reregister your business name renewal.

Small Business Answers owns more than one business name, and one of those names came up for renewal. In the mail, we received an official-looking letter indicating our business name was expiring next month, which it was. This letter provided payment details for a 1-year renewal for $99 or 3 years for $189. Thentwo2 weeks later, an email arrived from ASIC, the official government body for business registrations, indicating the same but at the cost of $39 for one year or $82 for three years.

Registry Australia claims to be Australia’s leading and most reliable business registration service in their letter and offers you an online portal and automatic renewal notifications. ASIC provides an online portal and sends you automatic renewals. Registry Australia states they are independent of ASIC, and you are not required to pay any money. Still, as with all scams, youmust pay attention andy read this information in the letter.

Unfortunately, nothing stops Registry Australia from obtaining business renewal information from ASIC. Then contact you in the hope that you will pay them more money for them to pay ASIC the $37 or $88 on your behalf to reregister your business name.

Small Business Answers advise ignoring this correspondence from Registry Australia and only dealing with the official government channels. Besides that, overthree3 years, you will have an extra $111 in your pocket rather than funding a scam.

For more information on the official government method of registering a new business name, see Small Business Answers guide to Register a Business Name. ASIC also has a page on Scams

Registration Pty Ltd Scam

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In a previous article on Registry Australia, we identified a practice of offering business name renewal registration to Australian business owners at an inflated price over and above what the Australian Government ASIC charges. Registration Pty Ltd is up to the same scam.

This year it would appear that more companies can make a living by sending a paper imitation invoice by post to renew your business name. This time a company called Registration PTY LTD has sent Small Business Answers an invoice for $99 to renew its business name for one year. The same renewal through ASIC costs $39, meaning a premium of $60 for the same renewal. This $60 premium, according to their letter, gives you the benefit of dealing with an Australian company with friendly Australian staff. The only advantage we can see is they offer an auto-renewal feature which ASIC does not. Of course, they offer an auto-renewal as every year, they can collect an extra $60 from you, which you do not have to pay. The icing on the cake in their letter is their last quoted benefit is “ .. and strive to offer you a fair price.”

Registration Pty Ltd do offer an early bird discount if you pay before a set date of $10 which unfortunately only encourages the unsuspecting business owner to pay before they receive their official invoice from ASIC (Australian Government)

Registration PTY Ltd does have a box at the bottom of their letter stating that the letter is not a bill and you do not have to pay any money. We do not question that Registration PTY Ltd will not renew your business name registration.

The business registration scams do not end with a letter in the post. A quick internet search will identify other companies advertising business name renewal at a premium. Some of these companies include:

  • Businessname.com.au
  • Namecorp.com.au

For further information about these scams, ASIC has a web page warning its customers of this practice.

Can’t pay my debts – Insolvency Reforms

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With Australian small business gripped by the effects of COVID-19, many find themselves in a position where they can’t pay their debts.  The Australian government has stepped in to help by introducing insolvency reforms.

Insolvency is when you find yourself in a position that you do not have the funds to pay the money you owe to others. As the owner of a small business your business and most likely you personally are responsible for paying your debts.

WHY should I pay my debts

If you don’t pay money that you owe to others, they have the right to recover those funds.  If you don’t have the funds, you become insolvent or essentially bankrupt.

Before January 2021 it was illegal for a business to trade if insolvent. The Australian government has introduced reforms that will allow a small business more time to restructure and survive the financial effects of COVID-19.

WHAT do insolvency reforms mean to me?

If you find your self insolvent and your debts are less than $1million, you will be eligible. Note that you must also have paid your employees their entitlements including superannuation and have your taxation lodgements up to date.

The small business reforms package consists of:

• A debt restructuring process providing a quicker and less complicated procedure for financially distressed but viable firms to restructure their debt.

• A liquidation process to allow faster and lower-cost liquidation, maximising returns for employees and creditors.

These reforms have been announced as temporary so at some point they will be removed!

Most importantly, this means that you can keep trading under your control while developing a debt restructuring plan.

HOW do I get help?

Traditionally you would need an administrator who would take control of your business which would be placed in voluntary administration.

Now a small business restructuring practitioner is recruited, which will reduce the complexity involved.

If you are facing financial stress, you should approach a practitioner immediately to discuss your options. There is a flat fee to do this but remember it is the difference between closing your business immediately and trading out of your insolvency.

The practitioner will work with you over up to 20 days to create a plan that your creditors must vote on.  If the plan is approved, the practitioner will administer the plan, including making payments on your behalf to creditors as set out in the plan.

HINTS – Small Business Reforms Package

A government fact sheet can be found here

You can find a registered restructuring practitioner here. Only a person registered with the Australian Securities & Investment Commission (ASIC) as a “registered liquidator” can act as a business restructuring practitioner.

SUMMARY – Can’t pay my debts

Key to your business success is good record keeping.  Knowing your financial position and understanding if your business has become insolvent means you may be able to trade out of your issues.  Alternatively, shut your business down without also destroying any personal assets.  The recent government reforms show sympathy and understanding of small business. They are making it easier to get back on your feet.