RE: [DNS] Is auDA auctioning non-transferable or transferable domain name licences?

RE: [DNS] Is auDA auctioning non-transferable or transferable domain name licences?

From: Ian Johnston <ian.johnston§>
Date: Mon, 28 Jan 2002 02:56:34 +1100

Thank you for your reply and clarification.  I agree with and had understood
most of what you say in your email (below).   I don't see that there is any
material difference between what we are saying.

What I hadn't fully appreciated is explained by your comment:  "The fact is
that people are chosing to transfer "business names" as a mechanism to
circumvent the restriction on treansferring domain names."   And as others
have pointed out, the transfer of a domain name may be achieved by acquiring
ownership of the legal entity (eg. company) that holds the domain name

If the current policy of prohibition of transfer (* see below) is
*ineffective* because it is not being applied in practice or it is being
easily circumvented, as you and others have stated, then there seems no
point in sustaining that policy under the new scheme.  Furthermore, the
current policy is simply more "red tape" for businesses wishing to transfer
their domain name licences for bona fide reasons.


* Current policy:  In the case of, the policy states, “A licence to
use a domain name cannot be transferred or sold to another party”
<>.  The licence terms and
conditions state that “The domain name may not be sold, lent or used by any
party other than the licensee, and the domain name may not be transferred
from the licensee to another party”

Ian Johnston, Policy Consultant
Small Enterprise Telecommunications Centre Limited (SETEL)
PO Box 58   Jamison   ACT   2614  Australia   mailto:ian.johnston&#167;
02 6251 7848 (Business)   02 6251 7835 (Fax)   0413 990 112 (Mobile)

SETEL is a national small business consumer association
Advancing and representing the interest of Australian small business
as telecommunications and electronic commerce consumers

-----Original Message-----
From: Patrick Corliss [mailto:patrick&#167;]
Sent: Friday, 25 January 2002 11:43 PM
To: Ian Johnston
Cc: [dns]
Subject: Re: [DNS] Is auDA auctioning non-transferable or transferable
domain name licences?

On Fri, 25 Jan 2002 13:02:42 +1100, Ian Johnston wrote:

> However, there can be significant costs and risks in acquiring a company
> other business for the purpose of acquiring a domain name licence.  As a
> matter of good management, to minimise these costs and risks would require
> measure of due diligence on the part of the acquirer (costly in itself) to
> ascertain the nature and extent of any liabilities (e.g. tax or
> obligations, etc. of the business under the laws of Australian States,
> Territories and the Commonwealth, and any other jurisdiction for that
> matter.

Hi Ian

I find most people get confused with the law and I am probably no exception.
However, I have had the benefit of working for the NSW Department of
and Consumer Affairs (now the NSW Department of Fair Trading) as a
officer wrt business names.

My understanding is that a "business name" is not a legal entity.  Unlike a
corporation, it cannot sue or be sued.  The purpose of the registration is
simply to record the details of the owner who could be a sole trader,
partnership or corporation.  It is almost exactly analogous to the
registration of a motor car where you don't sue the car but you do sue the
owner of the car.

What that means is that a person who slips on a milkshake in Coles New World
(a registered business name) goes along to the Dept of Fair Trading to
a search.  The last time I did one, about a year ago, the cost was $10.

That search will inform you that the owner is G. J. Coles Pty Ltd, a
corporation registered with the Australian Securities and Investment
Commission (ASIC).

The current regulations, as I have pointed out before, are not being
interpreted correctly.  It is assumed that a "business name" is equivalent
a "business".  This is not the case.  If I go to my local coffee shop, I can
talk to the owner and say I want to take over his business name viz "Sahara
Cafe".  That does not mean I am buying his business.

If he agrees, we can both sign a form, obtainable from the Dept of Fair
Trading, which will recognise the transfer of the "business name", Sahara
Cafe, from him to me.  The form asks for the name and address of the former
registrant and the name and address of the new registrant (or registrants as
the case may be).

Meanwhile, the coffee shop itself, and all of its assets, liabilities,
fixtures and fittings remain under the control of the former registrant.
Naturally he will probably chose another name for his coffee shop, say,

Of course, I do have to be careful in the sense that a creditor of the
owner may very well perform a search of "Sahara Cafe" and assume that I have
also taken over the business.

However, should that creditor issue me with a summons, my defence is easy.
just need to ask what was the date of the debt in relation to the date of
"business name" transfer.

The fact is that people are chosing to transfer "business names" as a
mechanism to circumvent the restriction on treansferring domain names.  This
is very difficult to prohibit without introducing the sort of legislation
by the tax system which requires a declaration of a change of beneficial

Please note that what I have said above does not apply to "corporations"
are, in fact, legal entities for which "due diligence" is required.

Best regards
Patrick Corliss
I'm on the Board of auDA (the .au country code) as well as TLDA (the Top
Level Domain Association).   Please note that anything I write is my own
personal opinion and does not necessarily reflect the views of any body
with which I am associated.  Please also note IANAL (I Am Not A Lawyer).
Received on Fri Oct 03 2003 - 00:00:00 UTC

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