To start a business in Australia, you need to first apply for an Australian Business Number or ABN. This is a basic necessity every Aussie business needs to take care of.
Taking care of the legality is the number one priority, and every legal step has guidelines that must be followed.
On that note, in this article, we’ll discuss what an Australian Business Number is, how to apply for one, and most importantly; what guidelines must be followed.
So let’s get started!
What Is An Australian Business Number (ABN)?
Australian Business Number Official Website
An Australian Business Number, or ABN for short, is like a special ID card for businesses in Australia. It’s a unique 11-digit number that helps the government and other businesses identify your company.
Think of it as your business’s fingerprint. Just like every person has a unique fingerprint, every business has a unique ABN. This number is used for all sorts of important stuff, like paying taxes, invoicing, and dealing with other businesses.
Here’s an explanation with a hypothetical example:
To illustrate, consider the hypothetical establishment of “Sydney Tech Solutions,” an IT consulting firm:
Upon launching the business, obtaining an Australian Business Number becomes imperative. The ABN acts as an official business code, akin to a Social Security Number for individuals, ensuring the business’s legitimacy.
Once Sydney Tech Solutions secures its ABN, it can include it on invoices, contracts, and tax returns. This numerical designation is indispensable because it allows the government and other businesses to accurately identify and track the company.
Why One Needs An Australian Business Number?
Having an Australian Business Number is essential for several reasons.
First, it’s required by law if you’re operating a business or trading as a sole trader. It helps the government keep tabs on businesses for tax purposes.
Second, many suppliers and customers may ask for your Australian Business Number when dealing with you, as it establishes your business’s legitimacy.
It also makes it easier to claim GST credits and facilitates smoother transactions. In short, an ABN is your business’s official badge, and not having one can cause unnecessary headaches.
How Much Does It Cost To Get An ABN?
Getting an Australian Business Number (ABN) is usually free! Yep, no upfront costs involved.
The Australian government doesn’t charge a fee for ABN registration. However, if you use a tax agent or service provider to help you apply, they may charge a fee for their assistance.
What Is ACN, and How Does It Differ From ABN?
An Australian Company Number (ACN), also known as the Australian Registered Body Number (ARBN) is a unique nine-digit identifier assigned to companies registered in Australia. It’s like a business’s fingerprint, helping track its activities.
On the other hand, an Australian Business Number (ABN) is also a nine-digit identifier, but it’s for all types of businesses, including sole traders and partnerships.
Here’s the key difference: ACN is exclusively for companies, while ABN covers a broader spectrum of businesses. ACN is essential for legal purposes, like signing contracts and financial reporting, while ABN is primarily for tax and government dealings.
So, if you’re a company, you’ll need an ACN, but most businesses will also require an ABN for tax and business transactions.
ABN Registration: What You Need & How To Get One
Getting your own ABN is a breeze. Just hop on over to the Australian Business Register (ABR) website and fill out a quick online form. It’ll only take you about 15 minutes, so no need to block out a whole afternoon for this task.
Now, here’s the important part: make sure you’ve got all your info spot on, especially your business name. The ABR will double-check it against their “Not-For-Profit database” to ensure it’s not already claimed by another nonprofit in Australia. If you find a name clash, you’ll have to pick a different one.
Timing matters too.
Start the ABN process early to avoid extra fees if you’re near your registration deadline. They’ll hit you with an extra charge if you wait until the end of the month.
A couple more tips: You must be an Australian resident, or if your company’s based overseas, you’ll need a representative in Oz. You can even apply without a company name yet. The application fee is $100 plus GST, which adds up to around $110.
What Do You Need To Apply?
Below are the things you should keep handy while registering for an ABN. The list may include some extra documents, and depending on your situation, you will need different sets of documents. It’s always recommended that you consult an accountant or a tax agent before you gather the necessary documents for your needs.
- Previous ABNs: If you had one before, bring those along.
- Your Tax File Number (TFN): Don’t forget it! Also, make sure you’ve got TFNs for your partners, directors, and trustees if they’re in the mix.
- Your ACN or ARBN: If you’ve got an Australian Company Number (ACN) or Australian Registered Body Number (ARBN), keep them handy. Good news – you can apply for an ACN and ABN at the same time if you don’t have one yet.
- Your Entity’s Legal Name: The official name on all your legal documents. You can sort this out while applying for your ABN too.
- ABN Start Date: This should match the date you plan to kick off your business activities. Don’t go more than six months into the future when applying.
- Professional Advisor’s License Number: If you’ve got a financial wizard on your team with something like an Australian Financial Services (AFS) license, jot down their license number.
- Tax Agent Registration Number: Needed for tax-related stuff, so keep it in your records.
- Authorized Contacts: These folks should have the green light to make changes for your business.
- Details of Associates: Shareholders, directors, etc. – their info varies depending on your entity type.
- Business Activity: What’s your main hustle? Whether it’s farming, building, investing, or making stuff, let them know.
- Business Locations: Share all the spots where your business operates. Just don’t give out sensitive info that could jeopardize safety.
Remember, you’ll get your ABN as soon as you wrap up your application. If you skip vital info or there’s a verification hiccup, it might take up to 28 days to sort things out.
A Brief On ABN Lookup
ABN Lookup is like a handy detective tool for checking out Aussie businesses that got themselves an ABN (Australian Business Number). Plus, if you’re in the ABN club too, it’s where you can locate yours!
This nifty tool helps you confirm who your suppliers and customers are. It’s like peeking at a business’s public profile and seeing things like:
- Their official, fancy, and everyday names
- What type of business they are
- Where they hang their business hat (including which state and postcode)
- If they’re a superannuation fund or charity
- Whether they can receive tax-deductible gifts
- If they’re part of the GST club
- And even when they got these registrations
The Australian Business Register says folks made over a billion searches here last financial year, so it’s kind of a big deal!
Australian Business Register (ABR) Home Page
How Can You Update ABN Details?
Since the government, other businesses and the community count on your ABN info being correct, it’s vital to inform the Australian Business Register whenever your details change. Make sure to do this within 28 days of any changes through the ABR website. Just remember, there are a few things you can’t change on your own:
- Your business name
- The actual names of individuals and sole traders. You’ll need to get in touch with the Australian Tax Office (ATO) for that.
- The official names of companies registered with the Australian Securities & Investments Commission (ASIC). They handle those updates separately.
How Can You Cancel Your Australian Business Number?
If you’ve closed down your business or sold it, it’s important to cancel your Australian Business Number. But before you go ahead, it’s a good idea to chat with your bookkeeper or accountant to ensure you’ve met all your filing and payment requirements.
One crucial point: if you’re thinking of canceling your pay-as-you-go withholding (PAYG), be sure to do that before you cancel your ABN.
You’ve got a few options for canceling your ABN:
1. You can do it online, using your myGovID.
2. You can fill out a form from the official ABR website and mail it in.
3. If you run into any issues with the above methods, you can get in touch with the Australian Business Register for assistance.
How Do You Reactivate ABN?
The folks over at the Australian Business Register are the ones in charge of making sure that only real-deal businesses get and hang onto their ABNs.
Now, here’s the thing: if you need to bring your Australian Business Number back to life or apply for a new one, you might need to show some proof that you’re already doing business or have plans to do so. This can include things like:
- Trying to snag some financing
- Getting your website up and running
- Putting your name out there through ads or social media
- Getting the necessary permits or insurance
- Renting or buying a place, equipment, or stock
So, if you’re pretty sure you’re the real business deal, go ahead and use this form to get your ABN back in action (or apply for a new one).
Conclusion
In closing, starting a business in Australia is a breeze with your trusty Australian Business Number (ABN) by your side. It’s like your business’s official ID, making tax and transactions a snap.
Remember, it won’t cost you a dime to get your Australian Business Number, thanks to the Australian government. And if you ever need to reactivate it, just show that you mean business by taking steps like securing financing, building your online presence, and getting your paperwork in order.
ABN Lookup is your secret weapon for checking out other Aussie businesses and keeping your own details up to date. And when it’s time to call it a day, don’t forget to cancel your ABN properly.
So, with your ABN in hand, you’re all set to conquer the Aussie business world!
Also Read:
What Taxes Do Small Businesses Pay In Australia?
Sole Trader vs Company: What Are The Key Differences?
