An ABN (Australian Business Number) is a unique number issued by the ATO to all eligible entities. The ABN system works together with the GST and PAYG withholding system.
Often confused with the ACN, a company’s ABN will always consist of their ACN with an additional two-digit prefix. You must have an ACN before you can apply for an ABN.
As a general rule of thumb, your ACN identifies your company, and an ABN identifies your company to other businesses and various government agencies (such as the ATO).
You can obtain your ABN completely free of charge with Veromo when registering a company with us.
If a company’s annual turnover exceeds $75,000 it will need to be registered for GST – and this only possible through applying with an ABN. A company below this threshold does not necessarily need to apply for an ABN, but it may still be in their best interests to do so.
Some advantages of registering an ABN include:
During the start-up phase where expenses exceed income, voluntarily registering for GST and an ABN will allow you to receive GST refunds/credits for the set-up costs.
When a business does not quote an ABN on their invoice, the payer must deduct 46.5% PAYG withholding tax from the amount payable. Quoting an ABN on invoices saves a company the time and hassle of re-claiming these withheld amounts from the ATO.
If you’re closing your business, or changing your business structure, it’s likely you’ll need to cancel your ABN.
You’ll also need to cancel your ABN when changing from a;
Yes, you can operate multiple businesses under one ABN (i.e. a sole trader can run a lawn mowing business and a bicycle shop with just the one ABN).
Yes, but as a Sole Trader you have to use your personal TFN.
Changed business circumstances may require you to change your business structure. For example, you might start as a sole trader, take on one or more partners and form a partnership, and then later still continue to grow and therefore register as a proprietary limited company.
You can pick whatever name you like, within certain guidelines. You cannot choose a name that is identical or very similar to an already existing company or business name. ASIC may also reject names that are considered offensive or suggestive of illegal activity. Also bear in mind that made-up and foreign words will be flagged by ASIC and will require manual review, stretching out the process from 15 minutes to up to 1 business day.
You can use our Name Finder to help you find the right name for your business!
A Company Name is the title under which it is registered with ASIC as a separate legal entity. Under the Corporations act, it must contain the legal terms/abbreviations ‘Pty Ltd’ or ‘Ltd’ etc. This suffix must be displayed on all relevant documents and at the business’ premises. Only a company is entitled to conditions such as the corporate tax rate and limited liability.
A Business Name is simply the name under which you want to conduct your business, or want your customers to identify the business with.
You will need to register a business name in Australia unless you are happy to trade under your own name, or fall within an exemption. It is not mandatory for a business to register a Business Name in addition to the default name given to them upon registration.
Registration on the Business Names Register identifies who is behind a business name.
In the case of a Company
A Company is a separate legal entity (think of it almost as a person), so when you register a Company with ASIC, you will automatically be given a Company Name of your own choosing. As this Company Name identifies the Company as a Legal Entity, it must include the legal terms/abbreviations ‘Pty Ltd’ or ‘Pty Limited’ etc (you are free to choose the spelling of the legal terms).
A Business Name is different to a Company Name in that it is registered after the Company Name (at an additional cost). Business names
The two reasons for registering a Business Name are:
|Description||Company Name||Business Name|
|Company with Business Name (dropped abbreviation)||Tip Top Pty Ltd||Tip Top|
|Company with Business Name (different Business Name)||Bookshelf Pty Ltd||Books and Shelves|
|Company without Business Name||Tabletop Pty Ltd||Tabletop Pty Ltd|
In the case of a Sole Trader or Partnership
A similar logic is used here. Sole Traders and Partnerships are automatically given names upon registration according to their Legal (Personal) Names. They can then choose to register a Business Name if they wish to trade under a Name that is different to their Legal (Personal) Names.
|Description||Legal Name||Business Name|
|Sole Trader with Business Name||Alan Briggs||Alan Brigg’s Plumbing|
|Sole Trader without Business Name||Alan Briggs||Alan Briggs|
|Partnership with Business Name||Alan Briggs and Autumn Spencer||Alan and Autumn’s Plumbing|
|Partnership without Business Name||Alan Briggs and Autumn Spencer||Alan Briggs and Autumn Spencer|
Yes you can. This is common for the sole trader structure. Using your personal name as a business name will also mean that you save on not registering an additional business name.
If you’re trading as a sole trader, partnership or trust and your business name is yours or your partner’s first name and surname, then there is no need to register. If you’re trading as a company, you’ll need to register a company name when you register your company.
You will need to register a Business Name in Australia unless you are happy to trade under your own name, or fall within an exemption. It is not mandatory for a business to register a Business Name in addition to the default name given to them upon registration.
This depends on your individual circumstances and preferences.
A Sole Trader or Partnership who uses his/her own name or a partnership business who uses the names of all the partners need not register a business name. For example, Josie Smith running her own florist store under her own name need not register a Business Name. However, if she wants to pick the name “Josie’s Flowers” for instance, she will need to register a business name.
A Company trading under its company name “Josie’s Flowers Pty Ltd” for example does not need to register a Business Name. However, if the company wishes to trade under any other name or simply drop the suffix “Pty Ltd” must additionally register a separate business name.
Yes, you can change your Company Name through processing the name change with ASIC. The general steps are outlined by ASIC per the following:
1. Choose a new name
Follow the same rules as when you chose your original business name.
2. Pass a Special Resolution
A meeting of members must be convened to pass a Special Resolution to change business name.
3. Lodge Form-205
Lodge this form with ASIC either online or on paper to process the name change.
4. Wait for ASIC to assess your information
5. Receive an assessment of outcome
Click on the link below for more detail on changing your business name.
Source: ASIC website
Goods and Services Tax (GST) is an overarching tax of 10% on most goods and services sold or consumed in Australia.
The two main interactions businesses have with GST are:
You MUST register for GST if:
You may be inclined to VOLUNTARILY register for GST if:
Your Tax File Number (TFN) is your personal reference number in the tax and super systems.
Look for it on your income tax notice of assessment, your payment summary (provided by your employer) or on your super statement.
An ACN (Australian Company Number) is issued by ASIC to all new companies upon registration. This gives each company a unique 9-digit identity code within the scope of the Corporations Act in Australia.
All registered limited companies require the suffix “Limited” or “Ltd” after the company name. They mean the same thing and the choice of which one to use is a matter of personal preference.
Yes, Partnerships need a separate TFN for their business.
Yes, Veromo is an Registered ASIC agent (No. 36980). This means that Veromo is legally recognised as an intermediary between Australian businesses and ASIC to help businesses with the registration process.
Want to know what ABN, TFN, Company tax all mean?
Take a look through our comprehensive glossary.