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 and confirm your details for invoicing and any sales or service orders. If you have been operating as a sole trader, you would have registered an ABN for your business activities. However, if you choose to restructure into a company, you will not be able to use that same ABN. This article discusses when you will need an ABN and how to register a new one for a company.
What is an ABN?
An ABN is a number that identifies your business to the government and community. You can use an ABN to (amongst other things):
- identify your business to others when ordering and invoicing;
- claim goods and services tax (GST) credits; and
- get an Australian domain name.
You may conduct any number of business activities under a single ABN as long as they correspond to the same business structure.
Can I Transfer My ABN?
It is not possible to transfer an existing ABN to another entity. As such, a company will need its own ABN, and you (as a sole trader) should make sure to transfer any necessary business assets to the company, which will continue running the business through the new ABN.
Notably, when setting up a company, you must first obtain an Australian Company Number (ACN) before getting your ABN. Then, after you register your company, you can apply to the Australian Taxation Office (ATO) for a new ABN, which will include your ACN with two extra digits in front.
The easiest and most common way to apply for an ABN is through the Australian Business Register. You can also use the register for goods and services tax and pay-as-you-go withholding. Alternatively, sometimes a registered tax agent who is registering your company can register the company’s ABN at the same time.
Once this occurs, you should cancel the ABN you had as a sole trader unless you are using it to run another business venture. However, before you do this, ensure that the business has fulfilled all and any of its lodgment, reporting and payment obligations.
Continue reading this article below the formHow Do I Cancel My ABN?
You can cancel an ABN in one of four ways. You can cancel it:
- online if you are registered for online services;
- by contacting the ATO;
- by lodging a NAT 2955 form; or
- with the assistance of a registered tax agent.
Following cancellation, you can no longer run a business in Australia. If you choose to start another business as a sole trader, you will need to apply for another ABN.
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Key Takeaways
To operate a business in Australia, you need an ABN, regardless of your business structure. If you initially set your business up as a sole trader (and register an ABN) and restructure to a company later, you cannot use or transfer that ABN to the company. As such, the company will need to apply for its own ABN, and you will need to transfer the business to the company. If the sole trader no longer requires the ABN, it should take steps to cancel it.
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Frequently Asked Questions
An ABN is a unique 11-digit number that identifies your business to the public and the government. If you are operating a business in Australia, you need an ABN.
No. If you restructure from a sole trader to a company, the company will need its own ABN.
The easiest way to cancel an ABN is to use online services or by calling the ATO. Your registered tax agent should also be able to assist.
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