Accounting & Tax

What’s the Difference Between ABN and ACN?

abn or acn

Every business in Australia needs an ABN — but not every business needs an ACN. In this guide, Fullstack breaks down the difference between the two.

Australian Business Numbers (ABN) appear to be very similar to Australian Company Numbers (ACN) at first glance. These two different numbers serve very different purposes, however — it’s important to understand the difference between them.

What is an ABN?

An Australian Business Number, or ABN, is a unique 11-digit number that used to identify a business operating in Australia. Every single business in Australia is required to have a valid ABN. Australian Business Numbers are issued by the Australian Taxation Office, or ATO.

ABNs function as identifiers that allow the ATO to keep track of the tax obligations and business activities of businesses in Australia. Australian Business Numbers also help businesses identify each other — all ABNs are listed on the Australian Business Register along with specific business details.

Regardless of whether you are a sole trader, a company, or a partnership, you’ll need to register an ABN if you plan on conducting business within Australia.

    ABNs must be presented on a variety of documents issued by businesses in Australia. These documents include:

  • Invoices
  • Business letterheads
  • Account statements
  • Receipts
  • Orders for goods and services.

How Do I Get an ABN?

The ATO provides businesses with the ability to register an ABN for free via a simple web form. Applying for an ABN is relatively simple and provides businesses with an ABN immediately after registration. Subsequent to registration, businesses are able to apply for other business registrations such as GST.

For more information on ABN registration, see the Fullstack guide on How to Apply for an ABN.

What is an ACN?

An Australian Company Number, or ACN, is only issued in specific situations. An ACN is issued only when a business is registered as a company. ACNs are 9-digit numbers that are issued by the Australian Securities and Investments Commission (ASIC) — not the ATO.

ASIC uses ACNs to monitor company activities. ACNs can also be used by shareholders or members of the public to monitor the activities of a company and examine the business structure of a company. ASIC, the corporate regulator in Australia, provides comprehensive information on the use of ACNs.

ACNs must appear on all public documents issued by a company. These documents include all forms lodged with ASIC, statements of account such as invoices, receipts, business letterheads, official company notices, written advertisements that present a specific offer, and orders for goods and services.

It’s not always necessary to display an ACN, however. Items and documents such as packages, advertisements that don’t present a specific offer, machine-generated receipts, and business cards are all exempt from ACN display.

How Do I Get an ACN?

    In order to register an ACN, an Australian business must register as a company. There are many steps involved with registering a company in Australia. These steps include:

  • Determining whether incorporating a company is the right choice for your business
  • Choosing a company name
  • Establishing an operational model for your business
  • Understanding your obligations as a company
  • Obtaining consent from members, occupiers, and officeholders
  • Registering your company through the Australian Government Business Registration Service.

Incorporating a company in Australia can be a complex process. For more information, see the Fullstack guide on How to Incorporate a Company in Australia

What’s the Difference Between ABNs and ACNs?

The fundamental difference between ABNs and ACNs is the purpose and type of businesses they are used for. The former is used for all business types, while the latter is used only for registered companies.

Both ACNs and ABNs are critical to the operation of a regulatory-compliant business in Australia and must be registered correctly. Trading without sufficient identifiers places companies and businesses at risk of violating company and tax law. To learn more about setting up an ideal business structure, contact Fullstack today.

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