Legal and trading names of employers
Legal and trading names of employers (PDF, 152KB)
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Training contracts for apprenticeships and traineeships are legal documents so it is very important that the parties to the contract are correctly and legally named.
Both the legal and trading names of employers must always appear in the training contracts.
The employer must provide the name of the employer's legal entity as only legal entities can enter into contracts. This will usually be an individual person's name, the names of one or more of the persons in a partnership, a company name or the name of an incorporated association.
A trading name, a business name or the name of a trust (in most cases) is NOT a legal entity and a contract cannot be made under these names.
Companies are registered with the Australian Securities and Investment Commission (ASIC) under the Corporations Act 2001 (C'wealth) and have an Australian Company Number (ACN). Technically a company is called a body corporate or a corporation. It will usually have Proprietary (Pty), Limited (Ltd), Pty Ltd (P/L) or Corporation in its name.
Incorporated associations are incorporated in Queensland under the Associations Incorporation Act 1981 (Qld). An association is a body, association, society, or other entity formed, for a lawful purpose. Incorporated associations have 'Inc.' in their name.
Partnerships and sole traders
A partnership is a business arrangement between two or more individual persons for the purpose of carrying on a business; however, they are not registered as such. A partnership name might be 'John and Cathy Smith'.
However, 'John Smith and Company' (or 'and Co.') is NOT a company in the legal sense. It is a partnership between John Smith and a number of unnamed persons. In this case, either all of the partners would have to be named or the contract could be registered under the name of 'John Smith, a partner in the business of John Smith and Company'.
In the case of trusts, the name of the trust will in most cases NOT be a legal entity. A trust is normally a legal relationship where one person, a partnership or a corporation (the trustee) holds property or rights on behalf of another (the beneficiary).
It is important to ascertain the correct legal name of the Trustee of the Trust to determine the legal entity for the training contract. E.g. 'Joseph Anthony Smith as trustee for the Smith Family Trust', or 'Smith P/L as trustee for the Smith Family Trust'.
Australian Apprenticeship Support Network (AASN) providers submitting training contracts for registration must ensure that, if the legal name of the employer is a trust, the name includes the legal entity of the Trustee, or the registration will be rejected until the correct details are provided.
Exceptions to this are:
1. For a trust to be a legal entity itself, it must be made one by legislation. E.g. section 3 of the Salvation Army (Queensland) Property Trust Act 1930 creates a 'body corporate' called the 'Salvation Army (Queensland) Property Trust'. In these cases, the trust name can be used on the training contract because it is a legal entity. These are usually registered in the Australian Business Register (ABR) as an 'Other Trust'.
2. A trust that is identified as a corporation will also be a legal entity and can be used on the training contract e.g. 'The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane'. These are usually registered in the ABR as an 'Other Incorporated Entity'.
In the case of a government department, the legal name is based on the ABR information. The trading name should be given as the name of the agency or delivery unit responsible for supervising and providing the training for the apprentice or trainee e.g. 'Department of Health Queensland; trading as: Prince Charles Hospital'.
Australian Business Number (ABN)
Employers are required to provide their ABN in the training contract. An ABN is a number for business dealings with the Australian Taxation Office. An ABN is needed to register for GST and other elements of the tax system.
Employers are required to register their legal entity name on the ABR. This generates their ABN.
The problem is that the employers enter their own details on the ABR and the details are not always technically correct. The ABR even has the following disclaimer:
"...neither the Registrar of the ABR nor the Federal Government guarantee that the information available through this service (including search results) is accurate, up to date or complete. This is because the official ABR is based on information supplied by businesses to the Registrar of the ABR. That information may be changed since it was supplied by the business and was included in the ABR, despite requirements on entities to formally notify the Registrar of any changes."
The correct legal entity name for the business that 'owns' the ABN must be stated in the legal name of employer section of the training contract even if the ABR is incorrectly completed. If it is ascertained that the ABR is incorrect, details of the correct name must be provided with the training contract.
Where the legal name of the employer entered in the training contract is different to the legal entity name registered in the ABR, registration of the contract will be rejected until the correct details are provided.
The employer's trading name or business name is the name by which the business is best known, or the name under which the business trades e.g 'ABC Plumbing'. The trading name may be, and often is, different from the legal entity.
As the trading name is not a legal entity, it cannot be entered as the legal name of the employer in the training contract.
'Self employed' apprentices and trainees
A person cannot be both the apprentice/trainee and the employer under the one training contract as a contract requires at least two parties.
However, if the apprentice or trainee is a partner in the business or a Director or Manager of a company, they can be contracted to the legal entity as an apprentice or trainee. If the employer is a partnership, the training contract should be made with another partner of the business. If the employer is a company, another public officer of the company should sign the training contract on behalf of the employer.
For further information
Contract an AASN provider on 13 38 73 or Apprenticeships Info on 1800 210 210.