I am changing my business from a sole trader to an incorporated entity. Do I need a new Australian Business Number (‘ABN’)?
Simply put, YES, a new ABN is required.
In Australia, regardless of what business structure you choose, an ABN is required to operate a business. This unique 11-digit number is the way that your business is identified. An ABN offers piece of mind by allowing people to look up your business using ABN Lookup to get confirmation of your details for sales or service orders.
Three golden rules for making the switch from sole trader to incorporated entity
1. A new ABN is required if you are a sole trader setting up a different business structure such as an incorporated entity.
Multiple business activities can be carried out under a single ABN if they correspond to the same business structure.
2. When setting up a new business structure such as an incorporated entity from sole trader, the sole trader ABN will need to be cancelled.
It is not possible to transfer an existing ABN to another entity. If you already have an ABN as a sole trader, you will need to cancel this ABN after the incorporated entity has been set up.
3. Before you cancel the ABN for your sole trade, ensure all business obligations have been fulfilled in regards to lodgment, reporting and payment.
How to cancel an ABN:
- Online, if you posses an administrator AUSkey;
- Contacting the Australian Taxation Office (ATO) on 13 92 26 between 8:00am and 6:00pm Monday to Friday;
- Lodging a NAT 2955 form; or
- With the help of a registered tax agent.
Before you start!
Note that an Australian Company Number (‘ACN’) is required before an ABN can be acquired. After registration for an ACN is complete, you can apply to the ATO for a new ABN, which is your ACN with an additional 2 digits.
Where to from here?
You can register for GST and/or PAYG. See the Australian Business Register for more information.
For more information about registering a company click here.
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