The jubilation that follows a successful company registration can quickly sour if the ABN application is refused or delayed for any length of time. Absence of an active ABN can affect your ability to open a company bank account and to effectively commence trading. We’ve identified five common causes for these frustrating delays and we’re keen to share this wisdom…
1. International Associates
If an individual non-resident associate does not have a TFN, it is highly unlikely that the ATO has a record for them. Failure to provide a valid personal TFN will almost always result in a refusal or manual review for up to 28 days. During this time an ATO representative should contact you to advise how to rectify the issue.
To avoid delay, this is what the ATO will communicate:
The associate should apply for a TFN as an individual residing outside Australia; or
The associate should post certified copies of the identification documentation ordinarily required to apply for a TFN to the ATO’s non-resident team. This should be accompanied by a letter expressing why he/she would like to proceed without a TFN, also citing the manual review reference number that has been issued.
Further instructions outlining the process that must be followed are available here .
The involvement of a company incorporated outside of Australia will automatically cause your application to be flagged for manual review. Recently, the ATO’s non-resident team has decided that it is not necessary to post the certificate of registration to their office. Instead, please advise the EasyCompanies team that an international company is a shareholder and we will liaise with the ATO on your behalf to expedite the processing of the ABN application.
2. Personal Details of Associates
This is the most common reason for an ABN application to be refused or flagged for manual review. The details that are included in the application must match the existing personal ATO record for each associate. Please note that this information may be different to an individual’s driver’s licence or birth certificate.
To ensure that you are listing the correct information, please review each associate’s most recent tax return. Pay particular attention to the current full name, date of birth, TFN and residential address. If you are unsure of any detail, it is best to call the ATO to confirm that what you are entering into the application does match their records.
This is a good opportunity to ensure that each associate’s personal information is up-to-date, particularly if his/her place of residence has changed or if a legal name change has occurred. If the latter is true and the official name change or marriage certificate was lodged with Australia’s Births, Deaths and Marriages register, then a simple phone call to the ATO is all that is required to amend the legal name on their records.
N.B. The personal details listed in the company register should exactly match those that are held by the ATO. Any inconsistency may cause undue issues when setting up company bank accounts, applying for business loans and entering into contracts. Any changes should be reflected on the company register by lodging an electronic Form 484 with ASIC.
3. Hyphen in Associate’s name
If an associate has a double-barrelled first, middle or surname, then this could cause an error in the ATO’s portal. If you do experience a delay for this reason, then you have two options: first, the affected associate can call the ATO and temporarily remove the hyphen in their recorded legal name, submit the ABN application again and, once successful, contact the ATO to reinstate the hyphen. The second option is to contact the EasyCompanies team who can sort this out on your behalf provided that you supply the required information to authorise our assistance.
4. Formatting Issues
When completing an ABN application it is crucial to enter only the required information into the textboxes provided. For example, if asked for the suburb name, please type that alone – Sydney, not Sydney NSW 2000.
This error will not usually result in a refusal or manual review but it will cause an unnecessary and avoidable delay.
5. Including a Minor as an Associate
It is legally acceptable for a minor (person below 18 years of age) to be a company shareholder. When applying for a company ABN you will be required to cite the TFN of this associate. If the minor has a TFN, the application will not be delayed. If the minor does not have a TFN, you will need to be prepared for the minor to apply for one. There is no minimum age specification for TFN application.
Please note that a shareholder is required to consent to his/her involvement with a company. If a minor is not able to give this written consent then it is worthwhile considering whether including the minor in the company is appropriate.
This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.