In Short
- An Australian Business Number (ABN) is essential for businesses to conduct transactions and comply with tax obligations in Australia.
- Applying for an ABN is a straightforward process that requires providing key business details and registering through the Australian Business Register.
- Having an ABN facilitates interactions with the government and other businesses, streamlining invoicing and taxation processes.
Tips for Businesses
Before applying for an ABN, ensure you have accurate information about your business structure and operations. Visit the Australian Business Register website to complete the application. An ABN simplifies tax processes and is crucial for invoicing, so keep it up to date and include it on all official business documents.
Table of Contents
An ABN is an Australian Business Number. It is a unique 11-digit number that identifies Australian businesses, regardless of how small or significant they may be. An ABN may also identify non-Australian businesses where they either carry on an enterprise in Australia or make sales in connection with Australia. An ABN can be attached to a sole trader, partnership, company or trust. This article addresses some frequently asked questions about ABNs and explains how you can apply for one and cancel it.
What Do You Use an ABN for?
As the unique number that identifies your business to the community and government, an ABN is used for various business-specific activities that require differentiation from other businesses. A non-exhaustive list of ways you can use an ABN includes:
- identifying your business when issuing invoices and ordering goods in relation to your business;
- receiving payments from clients;
- dealing with a range of government departments and agencies;
- claiming goods and services tax (GST) credits for any goods and services you buy for your business;
- claiming any energy grants credits that are applicable;
- avoiding pay-as-you-go (PAYG) tax being withheld from payments that you receive (where applicable);
- registering a business name; and
- registering an Australian domain name.
If you are a company director, complying with directors’ duties are core to adhering to corporate governance laws.
This guide will help you understand the directors’ duties that apply to you within the Australian corporate law framework.
Do I Need an ABN?
You require an ABN if you are running a business or other enterprise in Australia. You may also require a number of other registrations as a business. As most businesses derive income, it is typical to register for both an ABN and tax file number (TFN) at the same time. You also need to register an ABN before applying for goods and services tax (GST) or pay-as-you-go (PAYG).
Continue reading this article below the formAm I Eligible for an ABN?
Not everyone is entitled to an ABN. You must be carrying on a business or other enterprise to be eligible for an ABN. You also need to provide evidence that you have a business structure, and that you are carrying on a business or other enterprise in Australia.
How Do I Apply for an ABN?
You can apply for an ABN for free, online through abr.gov.au or register.business.gov.au. The registration process will first ask you questions to determine whether you are eligible to apply for an ABN. Once you determine that you are eligible, you will need to make some declarations, and provide identifying information. You will need to provide:
- the applicant’s and the business’ details (note that it is important to consider what entity will be applying for the ABN, and to complete the application under the correct entity’s name); and
- proof of identity information.
If your application is unsuccessful, you will receive a refusal number and a letter within 14 days setting out the reasons for the refusal and your options. If you receive a reference number, it may mean that there were issues with verifying your identity or you may need to provide more information. Your application and details will be reviewed, and you may be contacted to provide further information. The review typically occurs within 20 business days.
I Have a Foreign Business, How Do I Apply for an ABN?
If you are not an Australian resident, you may still be eligible to apply for an ABN. To be eligible as a non-resident, you must either be:
- carrying on an enterprise in Australia; or
- making sales in connection with Australia.
As a foreign business, you will need to provide either your Australian TFN or proof of your identity and a statement of your business activities in Australia.
Do I Need to Apply for a New ABN if I Was a Sole Trader and Am Now a Company?
A company will need to apply for a separate ABN. If you were previously operating as a sole trader and now operate as a company, you should cancel your old ABN. You cannot transfer your sole trader ABN to your company. For a company to successfully apply for an ABN, the company’s directors will need to supply their personal information.
How Do I Cancel My ABN?
You may wish to cancel your ABN if the business has ceased trading or if you are restructuring your business. You must inform the Australian Business Register (ABR) if you have sold your business, closed it down, or it is no longer operating in Australia or connected to Australia.
To be able to cancel your ABN, you must ensure that you have paid out all your invoices and liabilities, and meet any requirements from any government agencies you have been working with. You must cancel your PAYG registration before you cancel your ABN. Cancelling your ABN will also cancel the business’ registration for GST.
Key Takeaways
If you are running a business or other enterprise in Australia, you may need to apply for an ABN. You can apply for an ABN online through the Australian Business Register website. It is essential to ensure that the entity doing business is the same entity that is in the application. If your business is no longer operating in Australia or has closed down, you should cancel your ABN.
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Frequently Asked Questions
You can apply for an ABN online for free through abr.gov.au or register.business.gov.au. The application process requires you to confirm eligibility, provide declarations, and submit identifying information, such as the business entity details and proof of identity. You will receive your ABN immediately and confirmation within 14 days if approved. You’ll get a notification with the reasons and possible next steps if denied.
Yes, if you change from a sole trader to a company, you must apply for a new ABN for the company. You should cancel the ABN linked to your sole trader status, as you cannot transfer it to the company. Directors of the company must provide their personal information for the application.
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