Buying a business can be exciting. You may be acquiring customers, goodwill, stock, equipment, a lease, a website, social media accounts and a business name that already has market recognition.

But one issue is often overlooked: have you actually acquired the right to protect and use the brand?

Many purchasers assume that once the business name is transferred, the brand is theirs. Unfortunately, that is not always the case. A business name registration, domain name, logo file or social media account does not necessarily give you exclusive rights to stop someone else from using a similar name or brand.

Business name registration is not the same as trademark protection

A business name registration allows a business to trade under a particular name. It helps identify who is carrying on the business.

However, it does not automatically give the owner exclusive rights to the name as a brand.

This is an important distinction for business purchasers. You may have paid for a business name and goodwill, but unless trademark rights have been properly considered, there may still be gaps in protection.

For example, another business may already have a registered trademark that is similar to the name you have acquired. Alternatively, the seller may have used the name for years without ever applying for a trademark.

What brand assets should be checked when buying a business?

When buying a business, the sale contract should clearly identify what brand assets are included in the transaction.

If these assets are not properly identified and transferred, the purchaser may later discover that they do not control the full brand they thought they were buying.

Why trademarks matter after settlement

A registered trademark can protect a business name, logo or other distinctive brand asset for particular goods or services.

For a purchaser, this can be valuable because it may help protect the goodwill and reputation that formed part of the purchase price.

Trademark protection may assist where another business starts using a similar name, a competitor copies your branding, you want to expand into new locations, you later sell the business, or you want clearer rights in the name or logo used by the business.

Common mistake: assuming the seller owned the brand

A common issue after buying a business is discovering that the seller did not own all the brand assets.

For example, the business name may have been registered, but no trademark existed. The logo may have been created by a designer who retained copyright. The domain name may still be registered in the seller’s personal name. Social media accounts may be controlled by a former employee.

These issues can be difficult and expensive to fix after settlement.

Should you apply for a trademark after buying a business?

In many cases, yes. If the business name, logo or brand has value, a trademark application may be a sensible next step.

Before applying, you should consider whether the name or logo is distinctive enough to protect, whether similar trademarks already exist, who should own the trademark, which goods or services classes should be included, and whether any ownership issues need to be resolved first.

A trademark application should not be rushed. If the application is filed in the wrong name, for the wrong classes, or without checking existing marks, problems can arise later.

Who should own the trademark?

The trademark should usually be owned by the correct legal entity. That may be an individual, company, trustee company, partnership or another structure connected with the business.

This should be checked carefully. If the wrong person or entity owns the trademark, it can create problems when the business is sold, restructured, licensed, franchised or expanded.

What if the seller already had a registered trademark?

If the seller had a registered trademark, it should be checked and properly assigned.

You should confirm who owns the trademark, whether it is current, what goods or services it covers, whether it actually protects the business name or logo being used, and whether the assignment has been completed properly.

A registered trademark is not automatically transferred just because a business sale has occurred. The sale documents should deal with the transfer clearly.

What if there is no trademark?

If there is no registered trademark, the purchaser should consider whether applying for one is appropriate.

This may involve reviewing the business sale contract, checking what brand assets were transferred, conducting trademark searches, identifying the correct owner of the proposed mark, choosing the right classes of goods or services, and preparing the trademark application.

Trademarks and future business value

Trademark protection can support the future value of a business. If you later decide to sell, the buyer may ask whether the business owns registered trademarks.

If the answer is yes, and the registrations properly protect the name or logo used by the business, that can make the brand position clearer.

A registered trademark may also assist if the business expands, opens new locations, moves into e-commerce, licenses the brand, or builds a franchise model.

Practical checklist after buying a business

Key takeaway

Buying a business does not automatically mean you have secured the brand.

A business name registration, domain name or logo file may be useful, but they do not necessarily provide the same protection as a registered trademark.

If you have purchased a business and the name, logo or goodwill forms part of its value, it is worth checking whether the brand is properly protected.