If you are running a business you will need an ABN, even if your business is not going to register for GST.
However you must also register for GST if you are a business and your current/expected annual turnover is $75,000 or more (or $150,000 or more for a non-profit organisation) and/or you provide taxi travel (regardless of turnover). Click here it find out more about GST and business.
What is an ABN?
An Australian business number or ABN is a unique 11 digit number that identifies your business or organisation to the government and community.
If you are in business or thinking of going into business it is recommended to consult with a professional to save you time and potentially money. A good accountant can work alongside you to develop your business plan, manage the bookkeeping, identify risks and the structure for taxation as well as implementing financial management systems.
Why do I need an ABN?
- It helps people to see that you have an established business.
- For sole traders and partnerships, you need an ABN to register a domain for your website. The is the www.companyname.com.au
- If you want or need to register for GST, you must first get an ABN
- ABN is mandatory for certain dealings with some Government and non Government bodies. (For example you need an ABN to open a bank account for your new business which every new business should do.)
- You can’t lodge a tax return as a business without an ABN.
What do I need to apply for an ABN?
You can’t get your ABN until you have created the legal entity (ie the company), so you need to set up the company first and then do the ABN registration.
For sole traders, the only information that you may need is your Tax File Number, address, DOB and bank account details. You will also need to decide if you want a business name or need to be registered for GST.
For a ‘partnership ABN registration’, you will need your partner’s details including address, DOB and TFN, Tax file number.
For a ‘company ABN registration’, you will need the same details for each director.
Three ways to apply for an ABN
There are three ways to legally apply for an ABN
- through the Australian Business Register portal, In the same way that people can do their own tax returns, they can also do their own ABN registration
- using the services of a Registered Tax Agent – this is the simplest way to apply
- paper-based application via the ATO.
- Application for Sole Trader
- Application for companies, partnerships, trusts and other organisations
Considerations before registering for an ABN
- Business Structure ( Your business structure will define the success of your business in Australia since each module has its own pre-requisites and impacts upon the business itself. Registering your ABN as a sole trader is simpler and least expensive but that doesn’t make it a good reason. Multiple owners can set up as partnerships or companies.
- Brand How your business is going to be branded? Do you want a business name? If so, then its a good idea to check the availability of the name and domain before doing the ABN registration.
- GST Registration. You need to decide on this when you do your ABN registration.
- TFN registration If you set up a new partnership or company, then you need a TFN and you might as well do it at the same time as getting your ABN rego.
- Business Plan A business plan should question the validity of your ideas, the product/service target markets and so on and then be regularly reviewed and updated.
If you are in business or thinking of going into business and need accounting, http://ndaccounting.com.au/get-tax-file-number/taxation or bookkeeping services contact ND Accounting and taxation on 4272 3048. Natasha services Warrawong, Shellharbour, Wollongong, in fact all of the Illawarra and works alongside businesses to develop business plans, manage the bookkeeping, identify risks and the structure for taxation as well as implementing financial management systems.
You can view other tax tips for small businesses here.