Do I Need an ABN When Registering a Company?

If you’re thinking of starting a business, you’ve probably asked yourself: “Do I need an ABN when registering a company?” It’s a common question – and one that confuses many new founders. 

The short answer? You don’t need an ABN to register your company, but you will need one before your company starts trading. 

This article breaks down when an ABN is required, how it fits into the registration process, and the correct order to avoid delays or compliance headaches. Whether you’re about to register a company, preparing to trade straight away, or unsure what counts as “trading,” this guide will help you get it right from the start.

ABN when registering a company

Can a company exist without an ABN? In simple terms, yes. You do not need an ABN to register a company, but you must have one before your company starts trading.

This can be confusing. People often assume registration and trading happen at the same time. In reality, they’re separate steps. Registration creates the company as a legal entity, while trading activates its business operations and tax obligations.

In short: You can register a company without an ABN, but you’ll need an ABN before you send your first invoice or accept a payment.

What happens when you register a company

Registering a company with ASIC creates a separate legal entity. It exists independently of you as the owner or director and has its own rights and responsibilities.

To register, you’ll need to provide:

• The company name
• Registered office and principal business address
• Director and shareholder details
• Share structure and company rules

Once complete, you’ll receive an Australian Company Number (ACN). 

This marks the company’s legal existence but not its tax setup. The ABN and other tax registrations come next.

When your company actually needs an ABN

A company needs an ABN when it begins trading. This means that it starts carrying out business activities for profit. 

“Trading” typically includes:

• Issuing invoices or quotes
• Accepting client or customer payments
• Signing supplier or client contracts
• Advertising products or services

At this stage, an ABN is essential for invoicing, reporting taxes, and building trust with clients. Without it, you can’t properly issue tax invoices or register for GST if needed.

The correct order: company registration, ABN, and tax registrations

To stay compliant and avoid delays, follow this order:

1. Register your company with ASIC and receive your ACN.
2. Apply for an ABN through the Australian Business Register (ABR).
3. Register for GST (if your business turnover is or expected to reach $75,000 in a year. 
4. Register for PAYG (if your payroll setup requires it). 

This sequence keeps things running smoothly, establishing your legal identity first, then your tax and trading setup.

Here’s an at-a-glance summary of when and why these steps are crucial: 

Step	What it does	When it’s needed
Register the company (ACN)	Creates the company as a separate legal entity with ASIC.	Before you do anything under the company name.
Apply for an ABN	Registers the company for business and tax purposes with the ATO.	Before issuing invoices, accepting payments, or entering contracts.
Register for GST (if required)	Sets up indirect tax (GST) obligations.	When turnover is at or expected to reach $75,000 for GST.
Register for PAYG (if required)	Enables you to withhold employee taxes and remit them to the ATO.	When you start employing staff for PAYG.

Check out our company registration checklist to learn more about the whole process. 

Common scenarios and what to do

Every business owner’s journey looks a little different, and so does the timing of when an ABN becomes necessary. Ask yourself: 

• Do you plan to trade immediately after registration? 
• Will you hold your company for future use? 
• Are you buying an existing business entity? 

Your answer will determine when to apply for an ABN. Importantly, proper registration helps prevent delays and ensure compliance from day one. 

Registering a company but not trading yet

If your company is set up but you’re still refining your business model, testing the market, or waiting for funding, there’s no need to rush your ABN application. You can register your company with ASIC and obtain your ACN first. 

However, it’s essential to apply for an ABN before you conduct any trading activity — even preliminary steps like invoicing or signing contracts. Holding off too long could later slow down supplier onboarding or payment processing when you’re ready to trade.

Registering and planning to trade immediately

If your company will start operating as soon as it’s registered, apply for an ABN right away. Having an ABN in place allows you to issue valid invoices, receive payments, open business bank accounts, and register for GST (if required). 

This seamless transition from registration to trading ensures compliance and positions your business as credible and professional.

Buying or using a shelf company

When purchasing a pre-registered or “shelf” company, check whether it already has an ABN. If it does, confirm that the ABN is still active and linked to the correct details. 

If the previous owner cancelled or never applied for one, you’ll need to register a new ABN under your ownership before trading. 

Unsure whether activities count as “trading”

Some early business actions can blur the line between planning and trading. If you’re promoting services online, taking client enquiries, or negotiating agreements, you may already be viewed as trading under ATO guidelines. 

In these cases, it’s safer to obtain an ABN. The process is quick, free, and ensures your business operates transparently with customers and suppliers.

Moving from sole trader to company

If you’ve been operating as a sole trader, you might be considering a shift to a registered company. What happens then? 

When you move from a sole trader to a company, the company will need a new ABN  because there is a new legal entity. The old sole trader ABN belongs to you as an individual, while the new company will have its own ACN (from ASIC) and then its own ABN linked to that company. 

You’ll generally stop using the sole trader ABN for new business activity and start invoicing under the company’s ABN instead.

True, this will require a few extra legal and accounting steps. But there are several benefits to becoming incorporated. Registering a company can offer: 

• Limited liability (your personal assets are more protected)
• A more professional image with clients and suppliers
• More flexibility for bringing in co‑owners or investors. 

It can also offer tax planning opportunities that aren’t available to sole traders, especially as profits grow.

Common mistakes to avoid when registering a company

It’s easy to make small but costly missteps when setting up a company for the first time. Avoid these common errors to stay compliant and keep your business setup running smoothly.

• Don’t confuse your ABN vs ACN: Your ACN identifies your company as a legal entity, while your ABN identifies it for business and tax purposes. Treating them as the same can lead to filing and invoicing errors.
• Don’t trade or invoice before obtaining an ABN: Starting business activities without an ABN can lead to compliance issues and delay payments, as invoices won’t be considered valid tax invoices.
• Don’t forget GST registration: If your company’s annual turnover is $75,000 or more, you must register for GST. Missing this step can result in penalties or backdated obligations.

Do follow the correct setup order: Register your company first, then apply for an ABN and tax registrations. This sequence keeps your setup compliant and avoids unnecessary delays.

FAQs

Can I apply for an ABN before registering my company?

No. Since the ABN application requires your company’s ACN, you must register your company first.

Can a company trade without an ABN?

No. A company must have an ABN to issue compliant tax invoices and receive payments legally.

How long does it take to get an ABN after registering a company?

Usually, you’ll get an ABN within a few minutes to a day if all details are correct. However, it can sometimes take longer if the ATO needs to verify your information.

Do I need an ABN before registering a business name?

In most cases, yes. You generally need an ABN (or an ABN application reference) to register a business name, because the name is linked to your ABN for identification and public records.

What happens if I don’t have an ABN?

If you operate without an ABN, other businesses may withhold tax from payments to you at the top marginal rate, you can’t issue valid tax invoices, and you may face delays or confusion with suppliers and customers.

Ensure full legal compliance when opening a company 

While you don’t need an ABN to register a company, you’ll definitely need one once trading begins. Understanding the distinction between company registration (ACN) and business registration (ABN) saves time, avoids penalties, and ensures smooth startup operations.

Lawpath makes it easy to follow the right setup sequence — from registering your company and applying for an ABN to managing tax registrations. Let Lawpath help you start your business the right way, without the confusion or costly delays.