If you run a business, you must register for an Australian Business Number (ABN). On the other hand, an Australian Company Number (ACN) is a number only given to companies. A company is a particular entity (different from a sole trader business, partnership or trust) that carries on a business. There are various similarities between ABNs and ACNs. Furthermore, some business owners will require both an ABN and ACN. Therefore, this article will explain the difference between an ABN and ACN and how to know which one to register for. It will also explain the registration process for both ABNs and ACNs.
What is an ABN?
An ABN is an eleven-digit number that all businesses must obtain. It identifies the business and is used in commercial transactions and dealings with the Australian Taxation Office (ATO). As business names can be quite similar, a company’s ABN helps people ensure they are dealing with the correct entity. Your ABN is unique and therefore avoids confusion for consumers and businesses alike. Additionally, an ABN is issued to all businesses, irrespective of their size or structure (e.g. sole trader, trust or company).
It is important to keep your ABN information up to date via the Australian Business Register website, and to complete your BAS (Business Activity Statement) lodgments if you meet the requirements.
What is an ACN?
An ACN is a nine-digit number that only companies receive. As discussed above, the ATO issues ABNs. Meanwhile, the Australian Securities and Investments Commission (ASIC) issues ACNs. An ACN is similar to an ABN because it is also a unique number that identifies your company. ASIC uses the ACN to monitor companies. Additionally, like ABNs, ASIC can also use an ACN for identification purposes.
It is important to note that not all businesses are companies. Sometimes, an individual may say they run a ‘company’ when they mean that they run a sole trader business. A company is a particular business structure that is legally separate from its owners (called ‘shareholders’) and is managed by directors. Unlike other business entities like sole traders and trusts, ASIC strictly regulates companies. Accordingly, if directors mismanage the company, they may be subject to criminal and civil penalties.
A company that runs business activities will have an ABN and ACN. Once a company is set up, it will need to register for an ABN before it starts doing business. If the company only holds assets and is not directly involved in business activities, it may not need an ABN. The ACN is used as the base number for the ABN. This means they will be identical, except the ABN will have two additional numbers at the beginning.
Continue reading this article below the formHow Do I Find an ABN or ACN?
You can search for an ABN on the Australian Business Register’s website.
You can search for a company’s ACN either on the Australian Business Register or on ASIC Connect. If you are looking for further information on the company, you should search for the company on ASIC Connect. There, you will find details of the company’s:
- registration date and status;
- documents it has lodged with ASIC;
- address;
- shareholders; and
- directors
How Do I Register an ABN?
You can register your business, company or trust for an ABN by applying through the Australian Business Register. If you would also like to register your business name, you can register both at once through the Business Registration Service.
You can reactivate a previous ABN by applying for a new number. The application will provide you with the opportunity to list your previous ABN. The ABN will be reactivated if your business structure has not changed and you are still eligible for an ABN.
There is no fee for applying for or reactivating an ABN, but registering your business name costs $85 for a three-year registration (or $36 for one year). If your application is successful, you will immediately receive your ABN.
Updating or Cancelling Your ABN
It is your responsibility to keep your ABN details up to date on the business register. This includes details of your:
- business’ owner;
- address;
- contact information; and
- GST registration status.
You must update these details within 28 days of the change.
If you wish to cancel your ABN, you must inform the Australian Business Register and check that the register displays the ABN as ‘cancelled’.
How Do I Register an ACN?
You will receive an ACN when you set up a company. You can choose to set up a company yourself through ASIC or ask a lawyer or accountant to help you.
Firstly, check that your chosen company name is available by searching the register. Also, check that there are no existing business names or trademarks similar to your chosen name. If there are, you may not be able to freely run your business under that name. You can search trade marks on IP Australia.
You should also read and fully understand your obligations as a company officeholder. A company officeholder includes directors and company secretaries. Furthermore, you should ensure that any other company officeholders are aware of these obligations and that you have obtained their consent to be an officeholder before setting up the company.
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.
Key Takeaways
The ABN is the unique identifying number for all Australian businesses. No matter how small or large your business is, you must apply to the Australian Tax Office for an ABN. However, you only need an ACN if your business is a company. Indeed, companies have an ACN as their identifying number, and if the company carries on a business, it will have both an ABN and an ACN. A key difference between ABNs and ACNs is the registration process for each. For instance, while the Australian Business Register registers ABNs, you will need to obtain an ACN through the Australian Securities and Investments Commission.
If you need help with your ABN or ACN, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
If you operate a business in Australia, you are required to have an Australian Business Number. However, if you have registered a company through ASIC you will also be issued an ACN. An ACN is required by ASIC as it is used as a unique identifier for your company activities.
An ABN is a unique 11-digit number, while an ACN is a unique 9-digit number. A company’s ABN will always consist of their ACN with a two-digit prefix.
The cost of registering a company is currently $597 as of 1 July 2024. The cost increases each year from 1 July in line with the Consumer Price Index. Check with the ASIC website for the latest fees.
If you register your ABN through the Australian Business Register (the official government body), there is no cost associated with applying online or by paper.
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