Starting a business in Australia comes with its set of challenges, especially when deciphering the differences between an ABN (Australian Business Number) and an ACN (Australian Company Number). Many entrepreneurs struggle to understand the distinct roles these numbers play within different business structures. Research reveals that appropriate registration not only facilitates legal compliance but also enhances business efficiency. This article, focusing on “ACN vs ABN: 5 Major Differences,” provides a detailed guide to help you decide which registration fits your business needs. All the insights you need are detailed in the following sections.

What is an ABN – Australian Business Number?

An ABN, or Australian Business Number, is a unique 11-digit identifier that simplifies communication with the Australian Taxation Office and other government entities. This number is crucial for businesses in Australia, particularly for tax dealings and invoices. ABN registration is essential for integrating into the broader economic system, which includes GST tracking if applicable.

How to Obtain an ABN

  1. Determine eligibility based on your business activities in Australia.
  2. Complete the online application via the Australian Business Register website.
  3. Provide details about your business structure and identity.
  4. Submit the application; the ABN is often issued immediately after verification.

For more information, check out our article on How Long Does It Take to Get an ABN?

What is an ACN – Australian Company Number?

The Australian Securities and Investments Commission (ASIC) issues a unique nine-digit ACN (Australian Company Number) to every new company registered in Australia. This number serves to monitor companies under the Corporations Act 2001 and replaces an ABN when a company operates as a separate legal entity.

How to Acquire an ACN

  1. Select a company name and ensure it is not already in use.
  2. Register the business with ASIC and complete the required forms.
  3. Pay the registration fee.
  4. ASIC will issue an ACN, which must appear on all official documents.

ACN vs ABN: 5 Key Differences

1. Issuing Authority and Specific Purpose:

  • The ACN is issued by the Australian Securities and Investments Commission (ASIC) specifically for company identification.
  • The ABN is issued by the Australian Tax Office (ATO) and is required for taxation purposes across different business structures.

2. Number Format:

  • An ACN is a unique nine-digit number, structured specifically for tracking company activities under corporate law.
  • An ABN is an eleven-digit number, that helps to simplify tax dealings with the government.

3. Who Needs Them:

  • Any company operating in Australia must obtain an ACN as part of the registration process.
  • An ABN is necessary for any entity conducting business activities, including sole traders and partnerships.

4. Public Accessibility:

  • ACN details are crucial for official documents, ensuring transparency about the company’s legal status.
  • ABN details can be searched via the ABN lookup website, facilitating verification and public dealings.

5. Application Process:

  • To receive an ACN, you need to register your company with ASIC and provide specific details about your company’s structure.
  • Applying for an ABN involves a direct application to the ATO, detailing your business needs and activities.

When to Use an ABN vs. an ACN

When operating a business in Australia, choosing between an ABN (Australian Business Number) and an ACN (Australian Company Number) is crucial. An ABN is required for all forms of businesses, including sole traders and freelancers, primarily for tax and business dealings with the Australian Tax Office. It is a unique eleven-digit number essential for trading goods and services.

Conversely, an ACN is mandatory for companies, serving as a unique nine-digit number issued by ASIC (Australian Securities and Investments Commission). This number is necessary when forming a company structure, enabling legal and documentation processes distinct from personal affairs. Always check the ABN lookup website to confirm registration details.

How to Manage and Cancel Your ABN or ACN

Managing your ABN or ACN involves keeping your registration details up-to-date, which you can accomplish by making updates on the ABN lookup website. To accurately reflect any changes in your business structure or personal information, promptly update your ABN or ACN details.

You should consider cancelling your ABN or ACN if you cease business operations or decide to restructure your business. To cancel an ABN, you can submit a request through the Australian Business Register or directly contact the Australian Tax Office.

To cancel an ACN, you must file formal paperwork with ASIC. Remember, cancelling will affect all business activities associated with the number, and reinstating it may require a new application process.

Conclusion

Now that you’ve explored the key distinctions in the “ACN vs ABN” debate, and understood their respective importance in aligning with Australian business regulations, your next steps should be clearer. Whether you’re registering a new company or managing an existing one, the choice between an ABN and an ACN can significantly impact your business operations.

Have you determined which number will best serve your business objectives? What further questions do you have about managing these registrations effectively?