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If You Have an ACN for a Company Do You Still Need an ABN? |
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When your application for company registration is approved by the Australian Securities and Investments Commission (ASIC), an Australian Company Number (ACN) is assigned to your company. The ACN should be displayed on all your company’s documents. It is a number that will identify your company in all its transactions. An ACN consists of 9 digits and is different from the Australian Business Number (ABN).
While the ACN is issued by the ASIC, the ABN is issued by the Australian Business Register.
The ABN is an identification number that can be used to verify the details of your company. The information which you will provide as part of your ABN registration may be used to verify your company’s details which can in turn streamline communication with government agencies, e.g. the Taxation Department.
The public can also verify some of your company’s details online using the ABN Look Up. This service can also be useful to you in finding information on the companies with which you are dealing, for example correct name for invoicing.
When do you need an ABN?
Not all businesses with an ACN are required to obtain an ABN. There are instances, however, where an ABN becomes necessary, for example:
* If your business has an annual turnover of $75,000 or higher, then you are required to register for Goods and Services Tax (GST) and an ABN is required by Australian Taxation Office (ATO) for this. If your business has a turnover of less than $75,000, then registration for GST and ABN are optional. (However, by not registering for GST you are telling your clients/competition that your turnover is less than $75,000 – which you may not wish to divulge.)
* If your company is a non‐profit organization with an annual turnover of $150,000 or more, then you will need to register your company for GST purposes, and this requires an ABN.
* If you want your company to qualify as a gift deductible recipient or income tax exempt charity, then you will be required to obtain an ABN.
Advantages of the ABN
While getting an ABN is not an absolute requirement for companies, you may still wish to consider obtaining the ABN for your company’s purposes as it comes with the following advantages:
* It prevents other entities from deducting the pay‐as‐you‐go (PAYG) withholding tax from payments due to your company.
* It allows you to qualify for and claim energy grants credits.
* It provides easy identification for other business contacts to confirm your company’s details for ordering and invoicing purposes.
* The ABN generally makes it easier for your company to deal with the government and to conduct its business with other entities as well.
It’s easy to apply for an ABN. All you need is an Internet access. There are no fees to be paid and your company ABN may be immediately released the moment you complete the ABN application process online using the Australian Business Register (ABR) website.
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