If you are an Australian business owner, or you’re planning to open a business entity in Australia, then you will probably need an ABN number before working on getting your business noticed.

In this article, we explain what the ABN number is, how to apply for ABN for free, and what you should check before you apply for it.

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What is an ABN, and why do I need it?

Australian Business Number, or shortly, ABN, is an 11-digit business identifier ascribed to all Australian businesses. If you are an Australian business owner or want to open a company in Australia, you will likely need an ABN.

We can also describe Australian Business Number (ABN) as a business ID number used to process government and trade interactions. What’s more, some business transactions cannot be completed without an ABN.

Some of the cases where ABN is used include:

• Identifying your business to other businesses or the Australian Government during a trade or compliance activity
• Registering a business name with ASIC
• Invoicing and ordering
• Registering for GST or claiming GST credits
• Claiming energy grants 
• Registering for PAYG
• Creating or registering an Australian domain name for your website
• Processing tax

Who needs to apply for ABN?

Generally speaking, an ABN number is assigned to four different business groups. This is how we have:

1. ABN for individuals (sole traders/entrepreneurs)
2. ABN for companies (for companies registered in ASIC)
3. ABN for partnerships (for general partnerships with two or more people)
4. ABN for trusts (trusts that carry on enterprise)

Usually, businesses that have an annual turnover of less than $75,000 can choose whether or not to apply for an ABN, and register for GST later. Furthermore, sole traders who generate more than $75k annually must apply for an ABN and register for GST.

All in all, before you make any business decision, it’s advisable to consult a professional accountant and lawyer to avoid liability and paying hefty fines.

Benefits of having an ABN

There are plenty of benefits to having an ABN for your business such as easier cooperation with other businesses, the Australian Tax Office, and other government agencies. Furthermore, having an ABN number allows your business to:

• Claim GST credits (in case your business is registered for GST)
• Claim fuel tax (if your business is eligible)
• Claim energy grants credits (if your business is eligible)
• Avoid PAYG tax
• Obtain a trademark
• Apply for an eInvoicing system
• Get better prices on purchasing a motor vehicle
• Employ someone

Having an ABN number is handy in plenty of cases, and you should apply for it sooner rather than later. What’s more, you’re likely you’ll need one at some stage of your business growth, and you shouldn’t leave it on a “to-do” list for long.

How do I get an ABN and what do I need for it?

Depending on your situation, to get an ABN you’ll need:

• Proof of identity
• Reason for applying for an ABN
• The date you need the ABN to be effective (be careful, the date cannot be more than six months in the future)
• Your TFN number
• Location of your business
• Information about any officeholders such as partners, directors, and trustees
• The industry of your business 
• The explanation of what activities your business will provide
• Information about whether you have previously held an ABN

How do I apply for an ABN for free?

Once you check you have all the necessary documentation and information for your ABN application, you can go ahead and apply for it.

Generally speaking, there are two main ways to apply for an ABN: via the Business registration Service or through a tax agent. You can apply for an ABN for free by doing it yourself via the first way we described, however, if you go through a tax agent you can expect to pay a fee.

Checklist before you get an ABN number

Before you apply for your ABN number, you should check a few things, including:

• If you have an Australian Company Number. An Australian company has to register with ASIC before they start their application for an ABN number to get their Australian Company Number (ACN) or an Australian Registered Body Number (ARBN). Furthermore, an Australian business entity or a company will have to apply for a Director ID number and set up MyGovID.

• Your name, primary activity, and business location. Before applying for an ABN number you should know what your business name is (if you’re a solopreneur, use your own), your main business activity, and a business location.

• Your tax file number. Before applying for an ABN number, you should know your tax file number (TFN). 

• Your contact details. While applying for your ABN number you should ensure to provide accurate contact information. This includes you or any person who’s authorized to do business in your name (for instance your partners, tax, or BAS agent).

• The reason you require an ABN. Before applying for an ABN you should know the reason why you ask it. This is important since you won’t get it unless you specify the reason.

I applied for an ABN, what next?

Once you submit all relevant documentation for an ABN, you have to wait to get a notice about the progress of your application. Usually, you shouldn’t wait too long to find out what is happening, and you can expect three scenarios to happen:

1. To get notified that your application was successful
2. To get a reference number where you’ll be informed you need to submit more paperwork or information or that you’ll need more checking
3. To get notified that your application was denied

If your application was successful

In case you got notified your application was successful, you should get your ABN number immediately. Once you get it, you need to save the confirmation of your ABN along with your ABN details and store it in a safe place. 

Now, you can apply for other business registrations, and your business details will be added to the Australian Business Register. In case you don’t wish some of the information aren’t visible to the general public, you can always request them to be removed from the register.

If you got a reference number

If you got the reference number as a response to your ABN application, then it either means your details need to be checked more carefully, or you need to submit additional information. During this review period, you can always check the status of your application by using ABN Lookup. Once the application is successful, you’ll get your ABN number and a confirmation letter.

Your application wasn’t successful

This might be frustrating. However, there’s no need for panic. If your application was refused, you’ll get a refusal number along with a letter explaining why your application was denied and what you can do. This will help you assess the situation better and make amends to secure future (successful) applications or even seek professional help if the process seems overwhelming.

Final Words

Now, that you know what you need to get an ABN number, and what are the things you should check before you apply, you can go through your documentation slowly, and prepare yourself for the whole process. Our guide will help you apply for ABN for free effortlessly, and all you need to do is to follow the steps we described.

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