Do I Need an ABN When Registering a Company?

When establishing any business it’s important to know your obligations and tick all the necessary boxes. A company is one of the 3 main business structures in Australia and is popular because it can operate as its own legal entity separate from the director. An Australian Business Number (ABN) is an 11 digit number that allows the Australian Tax Office (ATO) to track your business activities. It is a requirement to have an ABN when registering a company. In this article, we’ll discuss these obligations and whether you need an ABN when registering a company.

Table of Contents

What Is a Company?

Unlike a partnership or a sole trader, a company is a stand alone legal entity separate from the individuals that are responsible for conducting its affairs. To create a company, a registration must be completed with Australian Securities and Investments Commission (ASIC). Once a company is registered, its separate legal status, property, rights and liabilities continue until the ASIC deregisters it. Each company in Australia also has an Australian Company Number (ACN) associated with it enabling ASIC to to identify and track a company’s activities in and outside of trade. Read more about the differences between an ABN and an ACN.

When Do I Need an ABN?

To run a business in Australia as any other structure than a Sole Trader you will need an ABN. To run a business through a company you need to first register the company with ASIC and receive an ACN. This should be done first before you can get your ABN, register for the GST and PAYG. If you are looking to start a company or incorporate, you must get an ABN before you start trading. However to register your company and bring it into existence legally, you don’t need an ABN.

How Does That Work?

A company, can exist without doing anything. It can own assets, receive mail and do all sorts of things. However in order to legally trade, a company must do so under an ABN and an ACN. Some of the benefits of operating a business through a company are:

  • Limited personal liability for directors
  • Minimised tax liability
  • A more legitimate public image image 
  • Capital raising opportunities 
  • The ability to carry forward losses offset against future profits

How Do I Register a Company?

Registering a company is much quicker than it was in the past. You can do so through a 201 form and paying the relevant fee. You can also use a Company Registration Tool which enables you to tick every box and ensure you have met all your obligations in registering your company.

Need specialised advice regarding your company?

Contact a Lawpath consultant on 1800 529 728 to learn more about company registration, customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

Should I Register or Buy a Shelf Company?

An alternative to registering your own company is purchasing a shelf company. Typically shelf companies have never traded and are a clean slate. They have been registered correctly and are fairly straight forward to purchase and assume control of. Previously shelf companies shortened the time it took to start trading. This is not the case any longer due to the modern registration process. However a shelf company can be advantageous when applying for a loan or bidding for a tender. This is because it has existed for longer and may appear more legitimate. Still curious? You can read more about shelf companies or speak with a business purchase and sale lawyer.

When Should I Get an ABN?

If you intend to trade through a company you should organise an ABN before trade commences. When registering a new company you are able to do this and it is usually more convenient to organise an ABN when registering a company at the same time. If you have purchased a shelf company it is wise to register for an ABN as soon as possible and do not begin trading until you have one. It is vital that your company has an ABN and ACN associated with it before you start running a business through it. Are you ready? We offer an easy to use ABN Registration service to get you there.

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