An Australian Business Number (ABN) is an 11-digit identifying number used in interactions with the Australian Taxation Office (ATO). An Australian Company Number (ACN) is a nine-digit identifying number used to make dealings between companies and is managed by the Australian Securities and Investments Commission (ASIC). The main difference is that an ABN is given for use in any business dealings whether one is a sole trader, contractor or small business, whereas an ACN is only applicable for larger scale companies.
A very important difference between the two is that an ABN is an extension of yourself and is representative of you as a business owner. Tax returns are done by you and based on your income using your personal name. Furthermore, while items may purchase items that you make deductible at the end of financial year, those items will not be under a business name, they’ll be under yours. Conversely, with an ACN, your company acts as a separate entity from yourself. Tax returns are lodged as a company with the company name on them and a benefit is that cars, property and more can be purchased under the company name.
The first question is usually, “Do I need an ACN?” The answer is, “If you have a company: yes.” So, how do you register for an ACN? You’re automatically given an ACN when you register a company. So how do you register a company? That’s what this article is about.
First step in registering a company is deciding whether you need to. This is best done with legal advice as your circumstances may differ from someone else’s. You may be advised to pursue a different business structure. However, let’s assume a company is what’s right for you. Now’s the time to choose a company name. It’s sort of like choosing a username for a registration-based site. Your company name can’t be the same as another listed company, it can only consist of certain characters, it may not include curse words or implications of illegal activity, etc. In addition, the company name can’t include certain additional words like “Royal” or “bank” and a few others. The name cannot mislead the public into thinking a company is associated with the government or Royal Family. For more information, check out this page on ASIC’s website.
Once officeholders (one director, one secretary and a minimum of one member to classify as a company) have consented to the creation of a company, the next step is to either contact a Private Service Provider (PSP) who has direct access to ASIC’s systems and can register your company, or alternatively, you can fill in this form and send it to ASIC. They will then process your application and, if approved, they will give your company an ACN, register your company, send you a registration certificate and give you a corporate key for your online account to update details.
Currently, ASIC will only handle applications sent by mail, so don’t bother looking for an online application process. As for cost:
- A public company with share capital application will set you back $479
- A Proprietary company application will also cost $479
- A public company limited by guarantee will cost you $395
You’ll be including a money order or cheque with your application when you send it in.
Once you’ve been successfully registered as a company, all you have to do is ensure that your ACN is displayed anywhere conducts business with other companies as well as to the public on any non-machine printed document (so, for example, machine receipts are fine and need not display an ACN), the ABN/ACN are displayed on documents published by your company, and lastly that all your company’s details are kept up to date. These are all required by law so it’s important to have a solid idea of what you’re required to adhere to once you have an ACN. A list of regulations can be found here under “Where the ACN must appear”.
We hope this article has placed all the information you need about ACNs in one place and we hope your application goes smoothly!