If you are thinking of setting up a business in Australia, you may have wondered how to get an ABN, or what an ABN even is! Keep reading this Legal Kitz blog to understand what it is, how to get one, and your obligations as a business owner.
What is an ABN?
An Australian Business Number (ABN) is an 11-digit number that uniquely identifies your business or organisation to the government and community. For example, it is used to interact with government departments and agencies such as the Australian Taxation Office (ATO).
Even if the name of your business is not unique, an ABN will always be unique.
An ABN also does not replace a tax file number (TFN). A business will also need its own unique TFN, unless you are also a sole trader.
Do you need an ABN?
Not everyone needs an ABN, and not everyone is entitled to an ABN. To get one, you must be running a business or other enterprise which has started trading or has undertaken business-like activities towards the commencement of trading (not inclusive of services provided as an employee, or for hobbies). ABNs are very useful to companies, and can be used to:
- Identify your business to others when ordering and invoicing;
- Avoid pay-as-you-go (PAYG) tax on payments received;
- Claims goods and services tax (GST) credits;
- Claim energy grants credits; and
- Allows you to get an Australian domain name.
It is important not to apply for an ABN if you are not entitled to one.
The process of getting an ABN
Applying for an ABN is free and online through the Australian Business Register (ABR). You will need to provide:
- the applicant’s and business’s details; and
- proof of identity information.
How long does it take to get an ABN?
If an application is successful, your ABN will be received immediately, and your details will be added to the ABR. A confirmation will then be received within 14 days.
You should print or save the confirmation of your ABN and ABN details. You can immediately apply for other business registrations as well.
What does an unsuccessful application look like?
An unsuccessful application will result in a refusal number, and a letter within 14 days confirming the refusal of your application. The reason for the refusal and options available to you will be listed, including your review rights. If you decide to exercise them, the application and details will be reviewed. This typically occurs within 20 business days.
If you are not entitled to an ABN, penalties for false or misleading statements can apply. A fine of up to $10,200 can occur for each false or misleading statement made in an ABN application. This will generally be waived if you either:
- made a genuine mistake, and reasonable care was made not to make the mistake; or
- voluntarily disclosed the false or misleading statement before you are contacted by the Australian Business Register (ABR).
Can I apply for something else at the same time?
You can also register a business name at the same time as your ABN application if you use the Business Registration Service. If not, you’ll need to go back to the service to register your business name after your ABN.
You can also apply for an ACN and an ABN using the same form on the Business Registration Service.
How to get an ABN as a foreign business?
You may still be eligible to apply for an ABN as a non-Australian resident if you are:
- carrying on an enterprise in Australia; or
- making sales in connection with Australia.
You will still need to provide either your Australian TFN, or proof of identity and a statement of business activities in Australia.
What are my obligations when I have an ABN?
With an ABN, you are obliged to ensure your ABN details are up to date. Details must be updated within 28 days of becoming aware of the changes, such as those to your name, address, and other contact details.
The ABR may request information about an ABN entitlement or identity. This must be complied with.
If you are no longer in business, you must request the cancellation of your ABN once you have met all of your tax obligations.
Legal advice
Having an ABN is important for your business: but don’t forget about all of your other back-end business needs. Check out our sister company, Business Kitz’ subscription service today to access our full range of legal, commercial and employment documents to begin your business with a solid foundation that ensures compliance. If you are unsure about how to best protect yourself and your future business, Legal Kitz can assist you. To arrange a FREE consultation with one of our highly experienced solicitors, click here today, or contact us at [email protected] or 1300 988 954.