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Starting your own business is the dream for so many Australians. However, it’s no longer as simple as setting up a lemonade stand at the end of a driveway.
Before you begin trading, you’re going to need a viable business model and an Australian Business Number (ABN) at the very least. An ABN is a unique 11 digit number, which allows the community and Australian Government to identify your business.
But how do you apply for an ABN? Do you need to register GST? What about registering a business name? Keep on reading to find out!
How to Apply for an ABN
Applying for an ABN is both simple and free. Before you head over to the Australian Business Registration Service website to apply, ensure you have the following ready:
- Proof of identification.
- Business structure.
- Business activities.
What can an ABN be used for?
While ABNs act as an identifier for Australian businesses for both the Australian Government and general community, it’s not their only use. Those with an ABN may be eligible to avoid PAYG tax on received payments, claim goods and services tax (GST) credits and energy grant credits. Further to this, registered ABN holders are able to apply for an Australian domain name – a great way to be easily identified online as an Australian business.
What do you need before applying for an ABN?
Before beginning an ABN application, it’s essential you have a valid business plan in mind, as you’ll need to select the correct business structure. This is extremely important as different structures (company, trust, partnership or sole trader) incur different costs, insurances and tax obligations. All categories will be required to provide a valid Australian tax file number of either the sole proprietor, partners, directors or trustees.
Depending on the chosen structure, you’ll need to provide the following during the application process:
- Tax agent registration number.
- Professional advisors licence number, e.g. Australian Financial Services licence number.
- Any previously held ABNs.
- The addresses of all operational business locations, unless there is a threat to the safety of individuals as a result of disclosure.
- Australian company number or Australian registered body number. This can be obtained via the Australian Securities and Investments Commission.
- The date you expect to begin trading as a business.
- Entity legal name, which is the business name you put on all legal documents for your business or operation.
- Contacts who are authorised to make changes on the businesses behalf, such as tax agents and owners.
- Details of associates, with documentation for each party.
- Business contact details including, but not limited to, physical address, phone numbers and email addresses.
- The proposed business activity, otherwise known as the main source of income for the enterprise, for example construction or investment.
How long does it take to get an ABN?
Once you have completed your online registration, the Australian Tax Office (ATO) will review your application within 20 business days. They may contact you if they need you to confirm your identity or provide further information, otherwise you’ll receive a letter of confirmation.
Can I change details on an existing ABN?
If circumstances change surrounding a pre-existing ABN, details such as contact information may be changed with ease online. However, if your business structure changes, a new ABN may be required. It’s recommended to contact a financial advisor before making any changes.
How to Register for GST
GST registration can be easily completed online via the Business Portal, through a tax agent or via phone. You will need a valid ABN before you can apply.
Do you have to register for GST?
Businesses in Australia must register for GST once their trading reaches a certain threshold. Unregistered businesses must conduct monthly audits to ensure they have not met the minimum threshold of a GST turnover (gross income minus GST) of $75,000 or more, or $150,000 for not-for-profits. Ride-sourcing businesses, such as taxis and limousines, must register regardless of GST turnover. When a business does reach the threshold, they have 21 days to register for GST before facing penalties.
How to Register a Business Name
A business name identifies a business to its customers, providing a point of differentiation from industry competitors. Once a business name has been decided on, it must be registered with the Australian Government before beginning trade. This can be done simply via a link on the Australian Business Services website.
Once you’ve begun the application process, you’ll be prompted to provide a business structure and ABN. The availability of the preferred business name will then be checked and approved. According to the Australian Business Services website, the entire application takes 12 minutes to complete.
How much does it cost to register a business name?
Much like a car, a business must be registered to trade within legal boundaries. The fee for registering or renewing a business name for a single year is $37 or $87 for three years in 2020. Payments may be made via credit card, invoice or BPay. It is important to note there is no fee for canceling or transferring a business name.
For more information on registering for an ABN, GST or business name in Australia get in contact with your local financial advisor.
The information in this blog is for general use only and should not replace professional counsel. Localsearch, nor the author, is not liable for the misuse of information provided in this blog.