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