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From the day-to-day operation of your business to the broader legal requirements, there is a lot you need to consider when you start a sole proprietor business. Nevertheless, a sole proprietorship is the simplest business structure and is relatively easy to set up. To begin trading as a sole proprietor, you will need to:

  • obtain your unique Australian Business Number;
  • register your business with the Australian Securities and Investments Commission (ASIC) if you are conducting business under a name other than your personal name;
  • register for Goods and Services Tax (GST) if your business meets the threshold; and
  • obtain any relevant licences to operate your business.

By having these documents on hand, you can lay sturdy foundations for the growth of your sole proprietorship.

Obtain an Australian Business Number

As you likely know, an Australian Business Number (ABN) is a unique eleven-digit number that identifies all Australian businesses. It can make interacting with government agencies and other businesses much more accessible.

It is currently compulsory for businesses with a GST turnover of $75 000 or more to have an ABN. If your sole proprietorship has a GST turnover of less than $75 000, you can nevertheless apply for an ABN. Obtaining an ABN for your sole proprietorship even if it does not meet the GST threshold is still a good idea considering an ABN is:

  • a useful way to verify your business identities when transacting with other companies;
  • a prerequisite to registering for GST; and
  • necessary if you wish to register an Australian domain name to set up your business website.

You can apply for an ABN via the Online Australian Business Register.

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Business Name Registration

In Australia, all sole traders have the right to trade under their personal name. Consequently, if you choose to trade under your personal name, you do not need to register that name with ASIC.

Alternatively, if you choose to operate your sole proprietorship under a different name, you need to register that business name with ASIC. You can easily register your business name online and pay the prescribed fee. In return, you will receive a certificate of registration which certifies that you have registered your business name.

You should note that before you register your business name, you will need:

You must understand that ASIC will not register two businesses with identical names. However, this does not necessarily mean that once you register your business name, you have the exclusive right to use, licence and sell the name. That is to say, you do not ‘own’ your business name by merely registering it.

To gain the exclusive right to use the name, you might want to consider registering a trade mark to protect your business name. Unlike registering a business name, registering a trade mark is not a legal requirement. However, it can be a useful way to maintain your business’ competitive advantage, given it allows you to exclusively use your business name when marketing and selling your goods and services.

Register For GST

If your sole proprietorship meets the GST threshold (currently $75 000 or more), then you must register for GST. In saying that, even if your business does not meet the threshold, you nevertheless must register for GST if you intend to claim fuel tax credits or provide taxi travel. As a sole trader, your business’s Tax File Number (TFN) should be the same as your personal TFN. If you do not have a TFN for whatever reason, you must then apply for one online.

Obtain Relevant Licences

Often when starting a sole proprietorship, business owners must obtain particular licences. For example, your local government might require that you apply for certain permits or have an approved development proposal to operate your business on your premises. Often, you cannot begin operating your business without proper business licenses in place. To help you decide what relevant licences you will need to operate your sole proprietorship, you can take the Australian Business Licence and Information Service survey or get in touch with one of our lawyers.

Key Takeaways

To start your sole proprietorship, you will generally need to: 

  • apply for an ABN; 
  • register your business name if you operate under a business name that is different from your personal name; 
  • register for GST if you meet the threshold; and 
  • obtain any licences necessary for operating your business. 

If you need help compiling documents for your sole proprietorship, LegalVision’s experienced business lawyers can help. Call us on 1300 544 755 or complete the form on this page.

Frequently Asked Questions

Can I use a business name that someone has protected with a registered trade mark?

Generally no, considering you will likely be infringing on the trade mark owner’s exclusive rights to use their mark.

Is it necessary to protect my business name with a registered trade mark?

Whilst it is not a legal requirement that you register your business name as a trade mark, it can provide you with the necessary protection to secure your business’ identity in a competitive market. 


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