Yes you do.

To operate in Australia, regardless of what business structure you choose, you will need an Australian Business Number (“ABN”). An ABN is a unique 11-digit number that identifies your business or organisation. Having an ABN also makes it easy for other people to look up your business using http://www.abn.business.gov.au/ and confirm your details for invoicing and any sales or service orders.

You may conduct any number of business activities under a single ABN as long as they correspond to the same business structure. If you are changing your business from a sole trade to an incorporated entity, then you will need a new ABN.

It is not possible to transfer an existing ABN to another entity. If you already have an ABN as a sole trader, after the incorporated entity has been set up, as there is a business structure change, the ABN you had as a sole trader needs to be cancelled.  However, before you do this, you need to make sure that the business has fulfilled all and any of its lodgment, reporting and payment obligations.

An ABN can be cancelled in 1 of 4 ways. You can cancel it:

  • online if you have an administrator AUSkey;
  • by contacting the ATO on 13 92 26 between 8:00am and 6:00pm, Monday to Friday;
  • by lodging a NAT 2955 form; or
  • with the assistance of a registered tax agent.

You should note that when you are setting up an incorporated entity, you need to first obtain an Australian Company Number (“ACN”) before you obtain your ABN. After your company is registered, you can apply to the Australian Taxation Office (“ATO”) for a new ABN which will include your ACN with 2 extra digits in front.

If you require any assistance in setting up your company, please contact us. We can assist you in incorporating your company and ABN, GST and PAYG Registration. Once your company is successfully incorporated, we can also provide you with a guide and checklist about the next steps.

As a side note, performing work for another business does not automatically classify you as a sole trader, and not every individual is entitled to an ABN.  If you wish to operate as a sole trader, and you are unsure of whether or not you are entitled to an ABN, you can find out by completing the online questionnaire at https://www.ato.gov.au/Calculators-and-tools/ABN-entitlement–individuals—sole-traders/.

Are you considering restructuring your business? From our experience it can be a pretty complex process. Call LegalVision on 1300 544 755 and speak to one of our specialist business lawyers so we can help guide you through it today.

Lachlan McKnight

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