14.10.2020

Australian Business Number Basics: A Guide to ABNs

Written by Kadence Edmonds

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Setting up your Australian Business Number is one of the first steps on the road to starting a business.  

An Australian Business Number - more commonly referred to as an ABN - is a unique identifier of your business for both the government and community. Information from your ABN allows customers to check that your registration is up to date. Having an ABN allows you to access tax benefits, get an Australian domain name, and even claim energy grants.  

Given the importance of getting an ABN, we've put together a guide on what you need to know about Australian Business Numbers.

What is an ABN? 

An ABN is a unique 11 digit number that identifies your business to the government and community. The ABN is a public number which does not replace your tax file number.

You can use an ABN to:

  • Identify your business to others when ordering and invoicing
  • Avoid pay as you go (PAYG) tax on payments you get
  • Claim goods and services tax (GST) credits
  • Claim energy grants credits
  • Get an Australian domain name
  • Register a business name

Who needs an ABN?

To be entitled to an ABN, you need to be starting or carrying on a business in Australia. This means running a business selling products and services or engaging in commercial activity. The ABR website also states that an enterprise includes activities done in the form of a business, as well as some other activities, including acting as the trustee of a super fund, operating a charity or renting or leasing property.

Each business structure has different eligibility requirements: 

  • Sole traders

As a sole trader you are legally responsible for all aspects of your business including any debts and losses and day-to-day business decisions. They are eligible for an ABN

  • Partnerships

Partnerships must apply for an Australian business number (ABN) and use it for all business dealings

  • Companies

Companies that are registered with the Australian Securities & Investments Commission (ASIC) can apply for an ABN

  • Trusts

A trust is also entitled to an Australian business number (ABN) if the trust is carrying on an enterprise.

How much does an ABN cost?

The Australian Business Register (ABR) does not impose a fee for applying for an ABN online or by paper application. If you consult a tax agent to complete an application for you, they may charge a fee for their services. Otherwise, there is no cost.

Can the ABN be used for more than one Business? 

You can conduct any number of businesses/activities under the same ABN provided they all operate under the same business structure. If your second or subsequent business operates under a different structure, you need to apply for separate ABNs for each new business structure.

How do I apply for an ABN? 

Once you know what your business structure will be whether sole trader or company, you can apply for an ABN. 

The best place to apply for an ABN is on the ABR website, as you can also choose to apply for an ACN and business name at the same time. 

You should apply for an ABN before you start receiving business-related income or expenses. It's important to remember that business expenses will likely come before income, so an ABN should be applied for sooner than later.

What do I need to apply for an ABN? 

It’s good to have all the information you’ll need to apply before you start. 

  • Your tax file number (TFN) and those of relevant business associates
  • The legal name of your business - appears on all official documents or legal papers
  • The details of any business associates - associate requirements are different for each entity type
  • Any authorised contacts (those authorised to make changes or update information on behalf of the business)
  • All business contact details (the address, postal address, email address and telephone number of the business)
  • The activity of your business (and the industry its in)
  • All business premises and locations
  • The date your ABN is required (this is the date that you expect to commence business-related activities)
  • Tax agent registration number (optional)
  • Professional advisor number (optional)
  • A previously held ABN (if relevant)
  • Australian company number (ACN) or Australian registered body number (ARBN)

Provided you supply all the information required, you will usually receive online notification of your ABN immediately upon completion of the ABN application.

If you omit information or it cannot be verified an ABN will not be allocated immediately. Under these circumstances, your application will be processed manually and can take up to 28 days.

Updating your ABN details 

Because both the government,  other businesses and the community all rely on the information of your ABN you have a responsibility to keep your details up to date. Keep in mind that you must update your details within 28 days of becoming aware of changes.

You can update your details online here or by contacting the Australian Business Register (ABR). All updates made to your ABN online will take effect immediately. 

You can't update:

  • Business names
  • Legal names for individuals and sole traders who need to contact the ATO directly
  • Legal names for companies registered with the Australian Securities & Investments Commission (ASIC).

Name changes made by the ATO and ASIC will update the ABR automatically.

How to cancel an ABN

You should cancel your ABN if your business has been sold, closed down or is no longer operating in Australia. 

You can cancel your ABN online here, but before you do so you must ensure you meet any lodgment, reporting and payment obligations with any government agencies you deal with.

Cancelling your ABN will cancel registrations for goods and services tax (GST), luxury car tax (LCT), wine equalisation tax (WET) and fuel tax credits (FTC) and any authorised relationships between your myGovID and your ABN.

Disclaimer: None of the advice contained in this guide is intended as legal advice, contact the Australian Business Register for more information.