Why it is important to secure your brand prior to selling your business
Intellectual Property refers to a few different types of intangible property including, logos, images and descriptions used to describe goods, business names and trademarks. These things comprise the “look and feel” of a business and are what we generally refer to as “branding”.
Most businesses have not taken any steps to formally protect their branding. As a result, they face the risk of competitors copying key elements of their brand (such as using the same or similar name or logo) and passing it off as their own. Not only does this cause confusion in the minds of customers and clients but may result in a loss of sales or new opportunities. Irrespective of whether you are selling your business, it is a good idea to invest in brand protection.
When looking to sell your business, your branding is a key part of the commercial goodwill. A purchaser is buying the good name, reputation and clients associated with that business’s brand. In this regard, prior to going to market, it is important to safeguard your brand. Two of the simplest and best ways to do this are:
- Registering a Business Name with ASIC
- Registering a Trademark with IP Australia
- Register Social Media Accounts and Websites (Domain Names)
The business name is the trading name of the business and is what customers or clients refer to the business. The business name is an asset that is to be transferred to the Purchaser. A business name that is registered cannot be used by another entity. A registered business name reduces risk to the purchaser that another entity will register the same business name prior to settlement, thereby diluting the goodwill of the business and, in this regard, may assist in securing a better purchase price. Further, a registered business name can be quickly and be transferred to the Purchaser via ASIC on settlement.
A trademark is a legally protected mark that identifies your unique goods or service. The owner of a distinctive mark can apply to receive trademark protection. However, to maintain trademark protection you to must continue to use the mark in your field of business. That is, you can’t just register a cool name and sit on it. If you currently have a distinctive or unique logo and/or business name, you may be eligible to register a trademark over it. Like a business name, this legal protects this goodwill for both you and the purchaser and would be transferred to the Purchaser easily at settlement. Most importantly, a trademark gives you simple legal rights to enforce your ownership of a logo, name or other distinctive mark against those seeking to “copycat”.
Social Media Accounts and Websites
Prior to selling your business, it is a good idea to identify social media you currently use or that could be used in your business and secure these accounts ready to transfer to the Purchaser. Many businesses market via social media such as Facebook, Twitter and Instagram and it had become an appealing feature of a business to have a good social media handle being transferred. Likewise, websites are key sources of information about a business, and it is important to ensure this is up to date, useful and ready to transfer. Again, whilst these may seem to be “little things”, they all add up in the eyes of a purchaser when valuing a business and whether they feel they are getting a good deal with secured intellectual property.
If you require assistance with identifying and protecting the intellectual property of your business, Adams & Partners Employment Law Team can help you. Contact us on (02) 4721 6200.
Written by Amelia Hatton.