Setting up a business takes a lot of work—not to mention the administrative tasks that include filing and submitting endless forms and paperwork. An Australian Business Number, or ABN, is one of the requirements you must meet when setting up your business alone or as a sole trader.
If you are new to this process, this read is for you. Here are the most commonly asked questions about the ABN.
What Is An ABN?
The Australian Business Number or ABN is an eleven-digit, unique identifying number businesses use to transact with all government agencies and departments.
This number will be your business identifier and one you will use in all commercial dealings and transactions with the Australian Taxation Office. This makes the difference, especially for businesses with similar names, so the government and the public can be confident knowing they are doing business with the correct organization or company.
The ABN resolves any possible confusion for fellow business owners and consumers. Regardless of the structure or size, businesses are all mandated to get one, and all are issued one accordingly. All the ABNs comprise the Australian Business Register or ABR, the database for all businesses the Australian Tax Department manages on behalf of the Commonwealth Government.
Why Is It Necessary To Get Or Apply For An ABN?
If your business has a yearly turnover of $75,000 or more, you are mandated by the government to apply and secure an ABN.
Even if your business doesn’t reach this income threshold, it is best to apply for an ABN. Here’s why:
- An ABN in your tax invoice means that you can prevent your consumers from withholding tax from your payments.
- All transactions are easier to track, especially for tax purposes.
- If you plan to create a website for your company, an ABN will let you register a website name with a domain name of au.
- ABNs let you register your business name.
- It makes your business more professional and trustworthy.
How To Apply For An ABN?
Application for an ABN is simple as everything is processed online. All you need is to fill out the online application form, and then you have successfully applied in minutes.
How Much Does It Cost To Get An ABN?
This is the best news for the entire process because you can apply and get an ABN without paying for anything. Yes, it is 100% free. The government gives it for free, and you may only incur charges if you tap a business manager or accountant to process it for you.
How Long Does It Take To Get An ABN?
Due to its automated process, an ABN is sometimes issued a few minutes after completing the registration form. The only times when there would be delays would be if some information is missing or some data cannot be verified.
If this is the case, the system has to switch to a manual process, and when this happens, the turnaround time can be up to 28 days. If this is the case, you can check and track the progress of your ABN online.
Can You Use A Single ABN For Multiple Businesses?
This depends on the structure of your business. If your organizations share the same framework, you can use one ABN. But if the operations and structures differ, each business must have its own independent ABNs.
How To Update Or Cancel An ABN?
Changes in the business are expected, and your responsibility as the business owner is to ensure that you update your ABN to the business registry.
The following information should always be the current details: the business owner’s name, the business address, the primary contact information, and the GST registration status.
All updates in the system should be processed within 28 days of the modification. If you cancel your ABN, let the Australian Business Register know, and they will cancel it for you. When you look into the registry, your previous ABN will already be tagged as “cancelled.”
Who To Contact For Any ABN-related Concerns?
The ABN external site is your best resource if you have any questions or inquiries about your ABN. These concerns may be but are not limited to checking your ABN’s progress and updating your ABN’s details.