ABN vs ACN: What Is the Difference Between ABN and ACN?

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30 Mar 2020

If you are running a business in Australia, then you would have definitely heard of the terms ABN and ACN. These are registrations that have to be done with the Australian government to run specific businesses. ABN and ACN are different and have different purposes.

In this guide, we will see what ABN and ACN are all about, if and how you can register your business for it and the main differences between these two. Let’s first start with the basics of what ABN and ACN are.

What Is ABN?

Australian Business Number (ABN) is a compulsory registration for all businesses in Australia. It is a unique 11-digit number given to each of the individual businesses by the Australian Business Register (ABR).

Every business in Australia should have a ABN number which is associated with all their commercial transactions, dealings, holdings and tax compliances. Sometimes, there can be few businesses with similar names and ABN can be used to identify them. Many government agencies use this number to provide concessions based on the specific regions in terms of infrastructure or any other community services.

ABN must be present on various documents like account statements, invoices, order details and a lot more. There are also a few other regulations for all businesses registered with an ABN.

For anyone planning to start a business in Australia, they should get an ABN first. However, ABN is not required for individual employees or branches inside a business.

How Can You Register for an ABN?

There are three ways in which you can send out an application to get an ABN for your business.

  • Online Application: You can visit the official site of the Australian Business Register to register for ABN. The Australian Taxation Office (ATO) will review your application and provide the ABN number if all the details provided are satisfactory. If not, they may contact you for additional information.
  • Paper Application: You can attach the required details for the application like tax file number, entity legal name, authorized contacts, business locations and a lot more. You can visit the official page to get all the required details you need to submit through the paper application.
  • Via Agents: If you don’t want to spend too much hassling around to get all the documents ready to apply for ABN, then you can hire an agent.

Please note that while applying for ABN is completely free, you may have to pay some fees for the agents or for the external agencies you have hired to help out.

What Is ACN?

Australian Company Number (ACN) is different from ABN. Unlike ABN, not all businesses need to have an ACN. ACN is a 9-digit unique identification number issued by the Australian Securities and Investments Commission (ASIC). The ASIC uses this ACN to monitor the companies, regulate the management and deal with unscrupulous activities.

ACN is only needed if your business is managed by a board of directors who are different from the owners or the shareholders. Anyone can use the ACN to monitor the activities of the company.

Like ABN, ACN should also be present in all documents issued by the company which include receipts, invoices, letterheads, notices, bills, orders and other similar documents. A company can have both ABN and ACN if it’s running business activities. If not, the company can only register for ABN initially and once they plan to start the business activities, then it will need an ACN.

How Do You Register for an ACN?

You can register for ACN online through the Australian Business Register, send a paper application or hire agents to handle it, similar to the process of applying for ACN. However, you will need more details like:

  • Choosing a Company Name: You can only choose a company name that is not already registered to a company or a business. If you have already reserved a name with the ASIC, you may use the same company name. The company name should show the legal status explicitly like whether it’s a limited or unlimited company and private or public.
  • Choose the Addresses: You have to choose a registered address where all the communications to the company will be sent and another address which is where your business will be conducted. This address shouldn’t be an address of a post office.
  • Details of the Directors: You should submit all details of the directors like their names, date of birth, residential address and place of birth.
  • Details of the Shares: This is a broad category where you have detailed the total number of shares, the paid and unpaid shares, the classes under which the shares come, details of the shareholders and other associated information.

The cost of registering for an ACN is not free. There is a variable rate that can be anywhere from $408 to $495. You can see more details about the cost of registering for an ACN here.

What Is the Key Difference Between ABN and ACN?

The primary purpose of the ABN and ACN is the main difference that sets both of these apart. While ABN is compulsory for any kind of business in Australia, ACN is for businesses that are companies. By company, we mean a separate structure for maintaining legal and financial records with a central body that’s different from the founders.

ABN is more of an identification to mark the businesses that run in Australia. But ACN is a form of regulation for the government to keep an eye on the companies and the way in which they conduct the business, ensuring if the activities are within the legal limits and checking for proper tax fulfilments.

How Do I Find and Verify ABN and ACN?

As we touched earlier, all businesses should mention their ABN and ACN, if applicable, on all their public documents. If it isn’t present, anyone has the right to demand the business to provide ABN.

Once you have obtained the number, you can go online and use the official website to get the public details of the business like registered name, registered date and address. For ACN, you can find additional details of directors and shareholders.

Frequently Asked Questions on ABN and ACN Answered

You may have a lot of questions about ABN and ACN, especially if you are just starting your business. So here are the answers to some of the questions in your mind.

How long does it take to register for ABN?

Generally, you will get a reply from the ATO within 20 business days after applying for an ABN. They may get back to you for additional details or complete the application and offer the ABN.

Should I register my business name before applying for ABN?

It’s not necessary to register your business name if you want to apply for ABN. you can even apply for both of it together when you are applying for ABN. Else, you can do so separately too after obtaining the ABN.

What if I change the details provided on ABN?

When the business details you offered during the registration of ABN is changing, you should inform the respective authority within 28 days of making the changes. The changes in address, phone number and business name can be updated with the ATO. However, if your business structure itself is changing, you may have to apply for a new ABN.

How long does it take to register for an ACN?

The time taken to register for an ACN is shorter when compared to ABN. It will take a maximum of five business days if you have submitted and paid for ACN.

Is the ACN registration fee an one-time payment?

Well, the registration fee is a one-time payment but you will have to pay annual review fees depending on your business structure. It is $50 for a special purpose company that is public and $54 for a special purpose proprietary company. The fee goes up to $267 for a general proprietary company and $1240 for a public company. You will be subjected to penalties if there are delays in the payment of the annual review fees.

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