Understanding ABN for Your Small Business

An Australian Business Number (ABN) is an 11 digit number that is used to distinguish your business for a variety of different purposes, and it also allows access to multiple benefits. Not everyone is entitled to an ABN, but if you are starting up a business and have taken steps such as securing financing, leasing property, or beginning advertisement, you might want to think about applying for one.

ABN Benefits

One of the major benefits to having an ABN is the ability to register an Australian domain name. You must have an ABN in order to register a business website for any domain ending in “.au”. Of course, having a “.au” domain can be instrumental in drawing the attention of potential customers on the web.

An ABN will also allow you to avoid PAYG tax on payments that you receive and is necessary for certain tax credits. With an ABN, you can claim Goods and Services Tax (GST) credits, as well as credits from energy grants.

Applying For An ABN

The first step is applying for an ABN is determining what sort of business you’re starting. If you’re the person who is solely responsible for the business legally and the business’ income is not kept separate from your personal income, then you’re likely a sole trader. If your business has shareholders, is run by one or more directors, and your income is kept separate from business income, then you likely have a company. If you don’t fit into either of these categories, then you could fall into a trust or a partnership.

Once you’ve determined the structure of your business, then you can apply for your ABN. Applying is free with the Business Registration Service on the ATO’s website. You can also register your business name at the same time or return to the Business Registration Service later to register your business name. If your business structure is that of a company, then you’ll also need to register for you Australian Company Number (ACN), if you haven’t already. This can be done at the same time as your ABN or before applying for your ABN.

After applying, you may receive notification of your ABN immediately, or your application may take longer. Applications can take up to 20 business days, particularly if not all of the required information was provided on the application. In that event, you may be contacted by the ATO for any information needed.

ABN Upkeep

Once you have your ABN, you’ll want to check the ABN Lookup to ensure that the details of your business are correct. It’s good practice to check these details periodically, as if any of the information for your business changes, you must inform the Australian Business Register (ABR) within 28 days.

Should the need arise, you may also cancel your ABN. This may become necessary should your business close or if the structure of your company changes, such as a transition from sole trader to a company or partnership. Either way, it is important to keep in mind that PAYG withholding must be cancelled before you cancel your ABN.

Small Business Help When You Need It

There is a lot to consider when starting a business and diving into it can be overwhelming. Let TCA Darwin help you get things off the ground. With everything from business start-up advice and information on potential grants to cloud-based accounting software implementation, we have everything you need to feel confident in your ability to succeed. Book your appointment today to see how our team can guide you through the steps to bring your business to life.