What Comes First The Business Registration Or ABN? I first answered this question in a 2014 blog post. This post has been updated using the ATO, ASIC and Business Gov information.
Every country has its own rules of business on what is needed, when, how and by whom. Australia is no different; our Government websites are great, easy to navigate and full of all sorts of fantastic information to get you started on the right foot for your business.
I’m often asked by Virtual Assistants wanting to start a business in Australia, “What do I do first; should I get an ABN or register my business name?” First things first, let’s work out if you even need to register your business name. Below is a very simplified process that you can follow.
Do I need to register a business name?
One of the many steps to starting your business in Australia as a Virtual Assistant. Most set themselves up as Sole Traders. It doesn’t matter if you’re a Virtual Assistant, an Entrepreneur or a small business, or you are running a practice (speaker, coach, etc.) The rules are still the same:
- If you want to use your name as your business name, i.e., Jacqui James, you do not need to register a business name.
- If you want to use a trading name, i.e., JMJ – EA for a Day, you must register a business name.
What Comes First The Business Registration Or ABN?
Often, the next question to follow is, “Do I need to register my business name before I apply for my ABN number?” The answer is NO. But you do need an ABN number before you apply for a Business Name.
Why do I need an ABN?
Your ABN is unique to you; it is like a tax file number for your business. “In that case, do I have to have an ABN number?” Again, the answer is no; you don’t have to, but (note the emphasis on but) I would strongly advise against this. If you don’t have an ABN number, then your trading partners, suppliers and clients need to withhold tax (ouch) if you cannot provide a valid ABN number on your Tax Invoices. It’s a bit of a Catch 22. By having an ABN, you announce that you are legit to everyone you want to do business with.
If you want to claim GST credits that you’ve paid (claim GST on expenditure), you need to have both an ABN and be registered for GST. You can’t have your cake and eat it too. The ATO has some excellent advice for those starting.
Do I need an ABN for a domain?
Of course, your business needs a website, a great business tool to support your business. If you want to have a domain that ends with .au, you must have an ABN number, for example, jacquijames.com.au; however, if purchasing a .com among other domains, you don’t need an ABN, as the time of updating this post it was not a requirement.
How much does an ABN Registration cost?
If you use the Business Gov website it is free. There are many sites which charge you to register your ABN. I always recommend going through the correct channels.
How much does a Business Name Registration cost?
The Australian Securities and Investments Commission (ASIC) website lists the fees applicable for applying for a business name. Again, there are many websites out there that will charge you considerably more so be careful.
Five must-do steps
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- Decide on your business name
- Apply for your ABN
- Register your business name
- To find a domain click here (Affiliate link)
- Make sure you have an accountant or business financial advisor
Since 2011, I’ve specifically been helping small business owners spend more time with their clients. I help them do this by taking the stuff they keep in their head and turning it into the systems and processes they need to drive their business. To find out more about how I can do the same for your business, let’s organise a chat.
Being an expert in business administration, systems and processes is the most important thing for my clients.
