Reading time: 5 minutes

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.

The Ultimate Guide for Startup Founders

The LegalVision Startup Manual provides guidance on a number of common challenges faced by startup founders including structuring, raising capital, building a team, dealing with customers and suppliers, and protecting intellectual property.

The guide includes 10 case studies featuring Australia’s top VC fund partners and leading Australian startups.

Download Now

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. 

Webinars

Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

Online
If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Online
Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Online
Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Online
Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Online
Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Online
Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Online
Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

Online
As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards