Australian Business Numbers (ABNs): An Explainer
Making sure you register an ABN is one of the first things you need to do when starting your business in Australia. Find out all you need to know here.
One of the first things you will do when starting a business is to apply for an ABN. Registering for one means that your business is legitimate and you can conduct operations within Australia. But what is it? And what are the benefits of having it? Find out the answers to these questions and more, as we provide you with an overview of ABNs.
What is an ABN?
ABN stands for Australian Business Number. They are unique 11-digit number used to identify your business and are issued by the Australian Business Register and operated by the Australian Tax Office. If you wish to conduct business in Australia, you must have one. However, please note that not just businesses are required to hold ABNs. For example, you will need one if you are establishing a self-managed super fund. When applying for one, you will need to provide relevant details about your business to the ATO.
Why Do I Need an ABN?
Besides being required by law to hold an ABN, there are several other reasons why your business will need one. Firstly, you must hold one to pay GST and PAYG. Furthermore, in order to give invoices, you will need an ABN otherwise payments to you may be withheld. Also you must have one if you want to register a business name or register a company. Besides legal reasons, you should also register an ABN to enhance the legitimacy of your business.
Am I Entitled to One?
To hold an ABN, you must be carrying out a business or enterprise within Australia. This means that you if you are establishing a charity or a trustee of a trust in Australia, you will be required to get an ABN. Furthermore, you will still be required to hold one if you are a foreign or offshore entity conducting business in Australia. You also have to demonstrate some form of business structure to be eligible for one.
Can I use the same one for multiple businesses?
Generally, you will be able to utilise an ABN for more than one business of the same type. What we mean here, is that you will not be able to utilise an ABN for both a sole trader business you operate as well as your company. If you are changing your business from a sole trader or partnership to a company, you will also be required to get a new ABN.
Thus, registering an ABN is a crucial first step in starting your business in Australia. If you encounter any difficulties or further clarification, get in contact with a business formation lawyer for relevant legal advice for you.
Lachlan is an intern at Lawpath as part of the content team. He is currently studying a Juris Doctor at the University of Sydney. Lachlan has a keen interest in corporate law and commercial litigation.