What is the difference between an ABN and ACN?

To run a successful business in Australia, you’ll need to register your operation. Australian Company Number (ACN) and Australian Business Number (ABN) are the two common identification numbers you’ll need to consider for your enterprise to fulfil the legal, tax and regulatory obligations.

This article will give you an overview of the difference between ACN and ABN, the need to register your operation, the process of registration and other additional things you need to know.

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What is ACN - Australian Company Number?

An Australian Company Number or ACN is a unique nine-digit number issued to an entity that registers as a company in Australia. Companies are required to display the ACN on all company documents.¹

What is ABN - Australian Business Number?

An Australian Business Number or ABN is a unique eleven-digit number that businesses can get to be identified by other businesses, the government and the community and make the interactions easier.²

What is the difference between an ABN and an ACN in Australia

ABNs and ACNs seem similar but are two separate identification numbers with different obligations.

Some differences are³:

Australian Business Number (ABN)

Australian Company Number (ACN)

An ABN is issued by the Australian Taxation Office (ATO). An ABN can be issued to all kinds of businesses. Businesses eligible for an ABN include sole traders, trusts or companies, regardless of their structure or size. An ABN is required for taxation purposes.⁵

An ACN is issued by the Australian Securities and Investments Commission (ASIC). An ACN is issued to entities when they register themselves as companies under Corporations Law.⁴ An ACN is only available to a registered company, that is, a legal entity separate from its owners or shareholders, managed by directors, with a particular business structure. These companies are strictly regulated by the ASIC. An ACN is used for public records and legal compliance.⁵

Do you need an ABN and/or ACN for business in Australia?

Need for an ABN

Yes, you need an ABN if you’re setting up a business in Australia. An ABN is required for a business to operate in the GST system, claim GST credits, confirm a business’s identity when ordering and invoicing, avoid pay-as-you-go (PAYG) tax on received payments, and access government online services.²

Need for an ACN

All registered Australian companies need an ACN. An ACN brings a company under ASIC’s regulations and ensures that it is operating within legal and regulatory boundaries.

A company needs an ACN for legal protection, credibility and taxation benefits.⁵

Registering for ABN and ACN in Australia

Registering for an ABN

You can apply for an ABN online using the Australian Business Register (ABR) or through a registered tax agent.²

1. Before beginning the ABN application, you need to check if your business is entitled to an ABN and decide on the structure for your business. You can determine your ABN entitlement by visiting the Australian Business Register website.
2. Gather information such as tax file numbers, previously held ABN, ACN, entity legal name, business contact details, and more, for the application.⁶
3. You can then go to the ABN application portal on the ABR website and follow the prompts to register for an ABN.

Registering for an ACN

Getting an ACN is a more complex process; it first involves setting up and registering a company.

Following is a general overview of the process⁷:

1. First, you need to decide if a company is right for you or if a different business structure might be better.
2. Choose a company name that is not identical to an existing one and reserve it.
3. Decide how your company will operate or be governed.
4. Understand and meet the legal obligations.
5. Get written consent from people who will act as the directors, secretaries and members of the company.
6. Register the company using the Australian government's Business Registration Service (BRS).
7. Once your application is processed, your company will finally be registered and you will receive an ACN.

What to keep in mind

• You can choose to apply for other registrations like GST, PAYG and a business name while you’re filling out the application for an ABN.⁸
• A company can have only an ACN, but if it conducts business, it will also need an ABN. A company needs to get an ACN before it can get an ABN.²

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Sources:

1. ASIC Australian Company Numbers
2. Australian Taxation Office Business or company registrations
3. Legal Vision Difference Between an ABN and an ACN?
4. Australian Business Register Business names FAQs
5. JB Solicitors What is an ACN and Why Do You Need One?
6. Australian Business Register What you need for your ABN application
7. ASIC Registering a company
8. Australian Business Register Applying for other registrations

Sources checked on 14 November 2023