ABN 101: Everything You Need to Know About Australian Business Numbers

February 20, 2024
4
minutes to read
by
Justin Bohlmann
Contents

Getting an ABN is the foundation of starting your new business. ABNs (Australian Business Numbers) serve as a unique identifier for businesses, facilitate government interactions, and are used to track your tax and benefits. We explore their significance, associated costs, and the step-by-step process to obtain one. So whether you're a seasoned entrepreneur or new to self-employment, this concise guide equips you with the knowledge to confidently navigate the world of ABNs in Australia.

Does an ABN cost money? 

An Australian Business Number (ABN) is a unique 11-digit number used to identify businesses and other entities that engage in business activities in Australia. It is an essential part of running a business in Australia, and it is required for many business-related activities, such as registering for GST, claiming business-related tax deductions, and opening a bank account. 

How do you apply for an ABN?

Applying for an ABN is a relatively simple process, and it can be done online through the Australian Business Register (ABR) website. The application process is free, and you can expect to receive your ABN within 28 days of submitting your application. 

When applying for an ABN, you must provide basic information about your business, including your business name, contact details, and details about the type of business activity you will be engaged in. You must also provide your Tax File Number (TFN) or Australian Company Number (ACN) if you have one. 

However, it's important to note that not everyone needs an ABN, only those carrying on business. If you are unsure if your business requires an ABN, you can use the ABR's online tool to determine if you need one. 

How long does it take to get an ABN?

The processing time for obtaining an ABN can vary. In general, if you apply for an ABN online and provide all the required information accurately, you can receive your ABN immediately upon completing the application. However, there are cases where the application may require manual review or further verification, which can extend the processing time.

If your application goes through manual review, it may take several business days to receive your ABN. The exact timeframe can depend on factors such as the complexity of your application, the current workload of the business register, and any additional information required for verification.

What type of business should I operate?  

When starting a small business, it's also essential to determine what type of business structure makes sense for you. There are several types of business structures to choose from, including sole trader, partnership, company and trust. Each structure has its advantages and disadvantages, so it's important to carefully consider which system is the best fit for your business. 

You can take the Thriday business structure quiz to see what could work for you, or a Tax Agent can also help you in the process of determining if you need an ABN and help you identify the business structure that best suits your business needs, as well as help you with the ABN application process and provide guidance on compliance and record-keeping requirements. They can also help you with other tax-related matters, such as GST and income tax. 

Key takeaways 

Getting an ABN is essential to running a business in Australia, and it is required for many business-related activities. Applying for an ABN is free and can be done online through the Australian Business Register (ABR) website. However, it's essential to determine if you need an ABN and also what type of business structure makes sense for your small business. A Tax Agent can assist you with this process and provide guidance on compliance and record-keeping requirements. 

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