Oct 27, 2021
An ABN is a unique 11-digit code that is issued by the Australian Taxation Office to identify sole traders, partnerships, companies and other organisations.
Most individuals or companies will be required to register an ABN in Australia if they are carrying out business activities, and it is important to understand what is required for this process.
Do I need an ABN?
The most important thing to do before starting an application is to work out if you need to apply for an ABN.
Generally, if you are intending to carry out any activities for a commercial purpose, you will need to apply for an ABN.
It is also important to note that you will require an ABN if you are receiving payment for your services, intending to handle invoices, or opening a business bank account.
Finally, you will also need to ensure that you are eligible to apply for an ABN based on the criteria listed at the beginning of the application.
What information do I need to provide?
The information you will need to provide when applying for an ABN will vary depending on your business structure.
For a sole trader, you will need to provide the following information:
- Full name (including any former names)
- Date of birth
- Country of birth
- Suburb of birth if Australia
- Tax file number
- Residential address – cannot be a PO Box
- Phone number
- Email address
If you have registered your company, and are now wanting to complete your ABN application, you will have to provide the following details about your companies associates:
- Full name
- Date of birth
- Tax file number
- If you’ve nominated an authorised contact – Their phone number and email address
What address details do I need to provide?
You will need to provide both your business address details and postal address.
Your business address must be a physical location where your business will be carrying out its operations. This can be a residential address if you intend to work from home.
Likewise, if your business will be moveable (such as if you are working as a contractor or out of various different venues) you will still need to include the details of one specific address that will act as the ‘home base’ for your business .
What does the nature of your activity mean?
The most common option for those carrying out business or commercial activities is "in the form of a business".
However, if one of the other listed options more accurately describes your business activities, please select that instead.
What is my main business activity?
When applying to register an ABN in Australia, you will need to declare what your main business activity is. To do this, you will just need to include keywords to describe what business activity, and choose the most appropriate option for the list provided. If you are intending to carry out multiple business activities, you will just need to include the details of your primary venture.
It is important to select the option that best matches your business activity, however, there may not be an exact match. If none of the options on the drop down list are appropriate, you may wish to try a different keyword in the description.
It is also worth noting that there is no expectation that your declared business activity will be an exact description of what your business activities will be. The Australian Taxation Office (ATO) is aware that each business is unique and multifaceted. Therefore, the emphasis is simply on choosing the option that is closest to your business operations, regardless of whether this is a perfect description.
Should I apply for GST?
GST is a 10% addition to the price of most goods and services in Australia.
You must register for GST:
- When your business will earn over $75 000 per annum
- You will provide taxi travel
- You want to claim fuel tax credits
You can also apply for GST voluntarily if you earn below this threshold or will not be providing taxi services. If you choose to register for GST voluntarily, you must remain registered for at least 12 months.
If you do wish to register for GST, you can do that through any ABN application that you get started with with us at EasyCompanies, and this does not incur any additional fee.
Should I apply for PAYG?
Being PAYG (pay-as-you-go) registered allows you to withhold funds from a payment to meet tax obligations.
You will need to apply for PAYG if you intend to:
- Employ staff
- Pay directors/shareholders a wage
- Pay a salary to any individual
The estimated amount that you expect to withhold is generally an indication of the reporting frequency:
- $25 000 or less = quarterly
- $25 001 up to and including $1 000 000 = monthly
- More than $1 000 000 = increased frequency
You can elect to apply for PAYG registration through an ABN application at no additional cost.
My ABN has been cancelled:
If your ABN has been cancelled, you can reactivate it in the same application as applying for a new one. Where the application asks if you have had an ABN previously you would select ‘yes’ and provide your cancelled ABN.
The ATO will reinstate your old ABN, rather than provide a new one for the same entity, and this will be reflect on the ABR's ABN lookup. Generally, when reactivating a cancelled ABN there is a chance the application will be flagged for manual review by the ATO, as they will want to conduct a few additional checks before reactivating that one.
Why is my ABN not the same as my business name?
If you are a sole trader, your ABN would be registered under your personal name, and any business names you wish to trade with are registered under it. For example, JOHN A SMITH (ABN 123 456 789 21) will have the business name JOHNS PLUMBING registered under the ABN.
Similarly, a company ABN will be listed as the company's name, and then any business names will be registered under the ABN.
You can apply for a business name at the same time as applying for an ABN through us at EasyCompanies, and will just need to check that your desired name is available to get started.
My ABN application is in manual review?
There are many reasons why your ABN application may have been pushed into review.
The manual review process simply means that the ATO just wants to conduct a few additional checks on the information you have provided before issuing an ABN.
In some cases, it may be that the details provided were not sufficient to verify the identity of each company entity, or that the ATO wants to compare these details to the information they have on record.
Generally, manual reviews are automatically resolved by the ATO, and your ABN will be issued shortly after. The service standard time for processing an ABN in manual review is 20 days.
My ABN application includes a non-resident officeholder/shareholder:
If you have applied for an ABN and included the details of a non-resident officeholder or shareholder, you will be required to send proof of identity documents to the ATO via post to verify their identity.
This involves collating the required documentation, such as a passport, birth certificate, photo identification card etc., and sending this to the ATO alongside your manual review reference number.
If your application is pushed into manual review due to the inclusion of a foreign resident’s details, EasyCompanies does also reach out to you with a detailed guide on how to manage this process.
How long does it take to receive an ABN?
ABN applications are processed immediately and typically ready within 15 minutes during business hours. If you choose to register for GST/PAYG, these details will arrive via postal mail from the ATO within 2 business weeks.All information provided on this webpage is general information about our products and services. Nothing on this webpage is intended to be professional advice of any kind and should not be relied on as such. You should obtain specific financial, legal or other professional advice before relying on the content of this webpage. By not seeking such advice, you accept the risk that the information on this webpage may not meet the specific needs of your business. Our liability is limited to the maximum extent permitted by applicable law in accordance with our website terms and conditions.