ABN vs ACN: Which one does your business need?
Last updated: 21.10.2024
If you run or plan to run a business in Australia, you’ll need an ABN, an ACN, or both. Let’s compare ABN vs ACN
Key takeaways
- Not every business needs to register for an ABN. To get an ABN, you need to be running a business or an enterprise
- ACN is only issued for companies registered with ASIC
- A company may need both an ABN and an ACN
If you run a business in Australia, you may need to register it officially and get an Australian Business Number (ABN) or an Australian Company Number (ACN).
While ABN and ACN are both unique numbers used to identify Australian businesses, there are big differences between the two. Whether you’ll need ABN, ACN, or both, depends on your business structure and type.
Let’s take a look at the top differences between ABN and ACN.
Table of Contents
What is an ABN (Australian Business Number)?
An ABN is a unique 11-digit identifier issued by the Australian Business Register (ABR) on behalf of the Australian Taxation Office (ATO). While not mandatory for all businesses, having an ABN simplifies registering for taxes like GST (Goods and Services Tax) and claiming
deductions on your business expenses.
The main purpose of an ABN is to make sure businesses are meeting their necessary financial obligations. Also, since many businesses can have similar names, ABN is a quick way to identify a specific business.
ABN can be used to:
- Claim Goods and Service Tax (GST credit)
- Avoid pay-as-you-go (PAYG) tax on received payments
- Claim energy grant credits
- Track your export activities and ensure proper tax compliance
- Get an Australian domain name
What types of businesses need an ABN?
Not every business needs to register for an ABN. To get an ABN, you must be running a business or an enterprise.
You need to get an ABN if you’re:
- Intending to make a profit
- Making supplies connected to Australia’s indirect tax zone
- Carrying or starting an enterprise in Australia
- Managing a Corporations Act Company
Sole traders, companies, partnerships, and trusts may all be required to get an ABN if they fulfil the above requirements.
There isn’t an income threshold for registering for an ABN. But if you expect your annual turnover to exceed AUD 75,000, you will have to register for both ABN and GST. If your turnover is less than AUD 75,000, you can choose to register for ABN now and GST later.
When applying for ABN/ ACN, you can get additional registrations through the same form, including GST, PAYG, and FTC.
What is an ACN (Australian Company Number)?
An ACN is a unique nine-digit number assigned by the Australian Securities and Investments Commission (ASIC) to every registered company in Australia. It acts like the business’s company identity card.
ACN indicates that your business is a separate legal entity. Companies registered with an ACN are required to maintain compliance as per standard regulations outlined by ASIC. The biggest benefit of ACN is that it shields shareholders and directors from personal liability and legally protects their personal assets.
When you have an ACN, it needs to be present on all the public documents of the company, including:
- Business letterheads
- Receipts
- Statements of account
- Orders for goods and services
- Official company notices
- Written ads making a specific offer
- Cheques
- Bills of exchange and promissory notes.
Who needs to apply for an ACN?
ACN is only issued for companies registered with ASIC.
Other business models that aren’t companies (like sole traders or trusts) don’t need an ACN. That’s because not all businesses are companies. A company is a legal entity and has a specific business structure.
If you’re unsure about your company structure, you can use the ‘Help me decide’ tool the Australian government provides.
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ABN vs ACN: The top differences between an ABN and ACN
| |
ABN (Australian Business Number) |
ACN (Australian Company Number) |
|---|---|---|
| Issuing authority |
Australian Taxation Office (ATO) |
Australian Securities and Investments Commission (ASIC) |
| Issuance criteria |
Issued to businesses regardless of their structure or size |
Issued when entities register as companies with ASIC |
| Purpose |
Identify and monitor a business for tax purposes |
Identify and monitor a company for legal and regulatory purposes |
| Eligibility |
Can be issued to all kinds of businesses, including sole traders, trusts, or companies |
Issued only to registered companies under Corporations Law |
| Required for |
All businesses for taxation purposes |
Registered companies for public records and legal compliance |
| Regulation |
Not specifically monitored by any regulatory body |
Companies are strictly regulated by ASIC |
| Structure requirement |
No specific structure requirement; applicable to various business types |
Only for companies, which are legal entities separate from owners/shareholders |
| Supported business structure |
Sole traders, partnerships, trusts, and companies |
Only companies need an ACN; other business types do not require it |
| |
ABN (Australian Business Number) |
ACN (Australian Company Number) |
|---|---|---|
| Issuing authority |
Australian Taxation Office (ATO) |
Australian Securities and Investments Commission (ASIC) |
| Issuance criteria |
Issued to businesses regardless of their structure or size |
Issued when entities register as companies with ASIC |
| Purpose |
Identify and monitor a business for tax purposes |
Identify and monitor a company for legal and regulatory purposes |
| Eligibility |
Can be issued to all kinds of businesses, including sole traders, trusts, or companies |
Issued only to registered companies under Corporations Law |
| Required for |
All businesses for taxation purposes |
Registered companies for public records and legal compliance |
| Regulation | Not specifically monitored by any regulatory body |
Companies are strictly regulated by ASIC |
| Structure requirement |
No specific structure requirement; applicable to various business types |
Only for companies, which are legal entities separate from owners/shareholders |
| Supported business structure |
Sole traders, partnerships, trusts, and companies |
Only companies need an ACN; other business types do not require it |
How do I find an ABN or ACN?
Find your ABN
- Use the Australian Business Register ABN Lookup service
- You can search by ABN, ACN, or business name
Find your ACN
- Use the ASIC company search service
- You can conduct an ACN number search by inserting the company name or other criteria within available fields
How do I register an ABN?
You can apply for an ABN through the official Australian Business Register website. Here are the steps you’ll have to follow:
1. Check for eligibility: Ensure your business is eligible for an ABN. You can face legal action if you apply for an ABN when you’re not actually eligible for one
2. Gather necessary documentation: You will be required to provide documents and necessary information, including:
- name and contact details of the applicant
- address and contact details of the business or organisation
- details of each person or organisation associated with the business (e.g. partner, director, secretary or shareholder)
- details of business activities
- tax file number (optional)
- proof of identity information such as name, address and birth details
- business structure
- business activity details
3. Complete the application: You can apply for an ABN through the Australian Business Register website or your Australian Taxation ATO profile if you already have a myGovID linked to it
4. Review the application response: You’ll receive the ABN once your application has been approved and you can start using it in all of your business documentation
Updating or cancelling your ABN
Australian Business Register (ABR) allows you to manage your ABN online or through other methods.
Updating your ABN details
Use the ABR online services through myGovID and Relationship Authorisation Manager (RAM). This allows for immediate updates. However, there are limitations on what can be changed online.
You can also contact the ABR for assistance and ask your registered tax or BAS agent to update your details. Another method would be to complete and mail a form (NAT number 2955) obtained online by searching for Update ABN details.
Cancelling your ABN
Cancel your ABN if your business is sold, closed, or no longer operates/supplies in Australia. Before cancelling your ABN, ensure the following:
- Fulfilling all lodgement, reporting, and payment obligations for government agencies
- Clearing any outstanding tax liabilities
You can cancel your ABN online through the ABR website if you meet specific criteria (authorised to update details and have your Tax File Number for verification). Other methods are:
- Call the ABR at 1300 306 275 between 8 am and 6 pm Monday to Friday
- Fill an Application to Cancel Registration form (NAT number 2955) obtained online
- Ask your registered tax or BAS agent to cancel your ABN on your behalf
How do I register an ACN?
Getting an ACN requires registering your business as a company. There are two ways to do it:
- Online registration: Use the Australian Government’s Business Registration Service (BRS). After online registration, your ACN will be automatically generated.
- Private service provider: Hire a lawyer or a professional qualified to register companies with ASIC. They will handle the application process for you, including obtaining your ACN.
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Disclaimer: The information contained is general only and largely our views. Before acting on the information you should consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions, estimates, mentioned products/services and referenced material constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.
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