8 November 2023
Registering for an Australian Business Number (ABN) is an essential step for anyone doing business in Australia. It can be an exciting time if you’re at the beginning of your business journey. But even for established businesses or experienced operators, there can be a number ABN pitfalls that may catch you unaware. In this article we delver into the world of ABN registration and common mistakes you should avoid in the application process.
An ABN is an 11-digit unique identifier that businesses and other entities use when dealing with the Australian government, other businesses, and the public. It helps streamline various processes, including taxation and business transactions.
Most businesses in Australia are eligible for an ABN. This includes sole traders, partnerships, companies, and trusts.
To make the ABN registration process as seamless as possible and to ensure you stay compliant, here are some common mistakes you should avoid.
While ABN registration isn’t always mandatory, it is often necessary to conduct business in Australia. Many suppliers and customers will require your business to have an ABN before they can engage with you. To save hassle down the track, it’s generally best to get your ABN before you start trading.
Ensure all the information you provide is accurate. Mistakes in your application can lead to delays, and if the information is incorrect, it might result in compliance issues down the track which can be a costly and time-consuming headache.
Choosing the correct business entity type is crucial. Whether you’re a sole trader, company, partnership, trust, or another legal structure, make sure you select the one that accurately reflects your business. Depending on the type of business structure you choose, it can offer different tax benefits. Typically this is a legal process and you may need the support of a legal expert to complete this correctly.
It’s vital to keep your ABN details up to date, especially if there are changes to your business, such as a new business name, address, or contact information. An ABN doesn’t expire, but it is essential to keep your details up to date. If there are significant changes in your business structure or operations, you must inform the ABR.
It seems like a little thing, but oftentimes it’s the little things that can create big problems for business owners.
You should not apply for multiple ABNs for the same business or entity. This can lead to confusion and potential legal issues. The process for obtaining an ABN differs depending on your business structure. Sole traders can apply for an ABN online via the Australian Business Register (ABR), while companies must go through the Australian Securities and Investments Commission (ASIC). And don’t forget, if your annual turnover exceeds more than $75,000 each year, you must also register for GST too.
Registering for an ABN does not automatically grant you the right to use a specific business name. You must separately register your business name with the Australian Securities and Investments Commission (ASIC) if you are operating under a name other than your own.
If you’re unsure about any aspect of ABN registration or how it applies to your specific situation, consider seeking advice from a tax professional or the ATO itself. Achieving your long terms business goals relies upon solid foundations and making sure you get the fundamentals of your ABN correct is crucial.
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*Retinue’s (ABN 66 658 618 449) payroll service includes the processing of hours and wages rates provided by you. We do not determine award rates for your employees or provide advice on the correct employment status of your employees. It is your responsibility to ensure that your employees are paid correctly and we recommend obtaining advice from specialised employment relations experts.
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