Here’s the difference between an ABN, ACN and Business Name – and how to decide what you need

Getting a business up and running requires that you undertake a few important steps. Most new business owners start by getting an ABN, but it’s easy to be confused about what else is required. What is the difference between an ABN, ACN and Business Name, and what does your business require? Let’s explore.

What’s an ABN?

An Australian Business Number (ABN) is a unique 11-digit number that identifies your business to the government and community. An ABN doesn’t replace your tax file number, but it is used for various tax and other business purposes. You can apply for an ABN online and at no cost.

Who needs an ABN?

While there’s no requirement for a business to register for an ABN, there can be major disadvantages in not having one. At the same time as the GST and ABN system was introduced, a Pay As You Go (PAYG) withholding system was also introduced. With an ABN, you will avoid PAYG tax on payments you receive, you can also claim GST credits and obtain an Australian domain name for your website.

What’s an ACN?

An ACN (Australian Company Number) is a nine-digit number issued by the Australian Securities and Investments Commission (ASIC). It is a unique identifier purely for companies, unlike an ABN which is issued to all entities carrying on a business. Companies and ACNs are regulated by ASIC (Australian Securities & Investments Commission) and it will cost $495 to register online for an ACN.

Who needs an ACN?

If you’re establishing a company, you’ll need to apply for an ACN. Companies are different to businesses – companies are legal entities, separate from their directors and shareholders, and governed by the Corporations Act 2001. Because companies have more complex business structures, there are higher set-up and administrative costs, as well as additional reporting requirements. If you’re starting a company, make sure you seek professional guidance from your accountant to ensure the effective establishment of a company structure.

What’s a Business Name?

A Business Name is the name under which you conduct your business. If you’re operating a business in Australia, you will need to register a business name. This is true unless you are operating as a sole trader under your own name (i.e. John Smith). You can register your Business Name online and the cost is $36 for one year, or $85 for three years.

Who needs a registered Business Name?

If you want to trade under a business name and not your own name, then you’ll need to register it as a business name with ASIC. It’s important to be aware that registering a business name does not mean you own the name, and it does not mean that you have the exclusive right to use the name. If you want full ownership and exclusive rights over your business name – or logo – then a trademark is required. Find out more about protecting your business intellectual property here.

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