Getting officially registered is usually the first step to legitimizing your business. Sure, you can still make money hawking your wares or expertise on Facebook or eBay, but if you want to transact with big companies or clients, you need the government’s stamp of approval.
If you want to do business properly in Australia, for instance, you need an Australian Business Number or ABN.
What is An Australian Business Number?
An Australian Business Number or ABN is a unique 11-digit number that identifies your business to the government and community. Along with your tax file number, it is used for various tax and business purposes.
TLDR version: having an ABN means that the Australian government recognizes your business as a legitimate operation.
Do I Need One?
You’re required/entitled to have an ABN if you are:
Carrying on or starting a business in Australia ;
Making supplies connected to the country’s indirect tax zone;
It should also be noted that you need to be decided on the structure of your business (e.g., sole trader/proprietor, partnership, or corporation) before you apply for an ABN. You may, of course, decide to change things up later on, but a different structure might require you to cancel your initial ABN and apply for a new one.
As a rule, workers and employees are NOT entitled to an ABN. If you are legally employed and aren’t running a business, an ABN could put you at risk of getting underpaid and missing out on benefits like superannuation, paid sick leave, and annual leave, as well as on the safeguards of the Fair Work Act (e.g., protection from unfair dismissal).
Employers that require their employees to get ABN’s when they aren’t entitled or required to have such are engaging in sham contracting and can be penalized by authorities like the ATO, the Fair Work Ombudsman, and state and territory revenue offices and workcover agencies.
How Do I Apply?
You can apply for an ABN online through here. The application is free of charge.
How Long Does It Take To Get an ABN?
If you are able to provide all the required information (and if there isn’t anything sketchy in such) when you apply online, you’ll probably receive an online notification of your ABN immediately after completing your application.
Should the Australian Business Register (ABR) need more information or are somehow unable to verify your identity, they will review your application within 20 business days and may contact you for further verification.
Can I Look Up Another Business’ ABN?
Yes, you may look up a registered ABN on the ABN Lookup website. This site allows you to access publicly available information that’s supplied by businesses whenever they register for an ABN, allowing you to check if their information is up to date and accurate.
When and How Should I Cancel My ABN?
There are generally two instances that would require you to cancel your ABN. One is a change in your business structure, as we’ve mentioned earlier.
You’ll need to cancel your current ABN and then apply for another one if you’re changing from a:
Sole proprietorship/trader to a company;
Sole proprietorship/trader to a partnership;
Partnership to a company
Should you plan on closing or ceasing business operations, you will also need to cancel your ABN on the ABR website.
It might seem tedious to go through this entire process, especially at the beginning, but having an ABN does have its perks. It allows you to confirm your business identity to other people when ordering and invoicing, claims Goods and Services Tax (GST) credits, claim energy grants credits, avoid Pay As You Go (PAYG) tax on payments you receive from clients, and obtain an Australian domain name.
Not bad for a few minutes’ work, yes?