How to become a Sole Trader
If you’re looking to start your own business in Australia, becoming a sole trader is the simplest and most straightforward way to do it. As a sole trader, you are essentially the sole owner of your business and you’re responsible for all aspects of its operations. This means that you make all the decisions, take on all the risks, and reap all the rewards. Let’s look at what’s involved in becoming a sole trader in Australia.
Step 1: Register your business name
Before you can start operating as a sole trader, you must register your business name with the Australian Securities and Investments Commission (ASIC). The registration process is quite simple and only takes a few minutes. You will need to provide some basic information about yourself and your business. Once your application has been approved by ASIC, you will be able to use this name when dealing with clients or suppliers. To help you come up with a unique business name, you can use this short business name quiz to identify some great options.
Step 2: Register for an ABN
Once your business name has been registered, the next step is to obtain an Australian Business Number (ABN). An ABN is a unique identifier for businesses that allows them to transact with other businesses and apply for certain government benefits. To apply for an ABN, simply visit the Australian Taxation Office website and fill out an online application form with details such as your contact information and type of business activity.
Step 3: Comply with tax obligations
As a sole trader in Australia, it is important to understand your tax obligations. You must report any income earned through your business activities on your annual tax return and pay any required taxes based on this income. Additionally, you may need to register for GST if your turnover exceeds $75,000 per year or if you are providing certain types of services such as medical or legal services. With a tool like Thriday, it’s super easy to keep accurate records of all receipts and expenses related to running your business so that eligible deductions can be claimed on your tax return when necessary.
Step 4: Automate accounting with Thriday
As a sole trader, Thriday is a financial management platform that can help you comply with your tax obligations. The platform uses advanced technologies like machine learning and artificial intelligence to automate the process of tax filing, including sorting income and expenses, monitoring GST, and producing reports for tax calculations. By automating your tax process in the same way ChatGPT does, Thriday allows you to focus more on your work as a sole trader, with the peace of mind that your tax responsibilities are being taken care of.
Becoming a sole trader in Australia is not overly complicated but there are some steps that need to be taken before you can start operating legally as one. It's important to register for both an ABN and GST, if applicable, so that you can fulfil all the necessary requirements associated with being self-employed in Australia. Lastly, don't forget about keeping accurate records of all income earned through your business activities so that these can be reported on time come tax season. With these things covered, you'll be well on your way towards achieving success as a solopreneur.