Do I Need an ABN to Operate a Business

You may have just taken the leap and decided to turn your dream business idea into reality. However, the administrative process involved with making this happen can put a halt to your excitement. Understanding these processes will ensure that you can jump right into your business from day one, without complications arising down the track.

Purpose of an ABN

One of the most common points of confusion that comes up with new business owners, is the need for an ABN (Australian Business Number). An ABN is a unique 11-digit number issued by the Australian Business Register that identifies your business. The purpose of an ABN is to essentially allow business transactions to be tracked for tax purposes. Obtaining an ABN is not technically compulsory in every instance; however, chances are you’re going to need one. This is mainly due to the fact that you require an ABN to register for GST.

Registering for GST is necessary for businesses with a turnover of more than $75,000.

Therefore, if your business has to register for GST you’ll also have to apply for an ABN. An ABN will also ensure you avoid PAYG tax being withheld from payments you receive. When issuing invoices to businesses you supply to, you will typically need to quote your ABN on the document. If you fail to do this, the business may have to withhold the tax in their payment to you. In addition, an ABN will be necessary if you want to apply for a business name or register a company.

Am I Eligible to Receive an ABN?

Before you can actually apply for an ABN, you’ll have to satisfy eligibility criteria. In order to obtain an ABN, you must be carrying out a business or enterprise within Australia. In addition, it’s important you have settled on a business structure prior to making an application for an ABN.

If your business isn’t currently active yet, you’ll need to have at least undertaken ‘commencement activities’. These activities can include:

  • Advertising

  • Establishing social media pages and/or a website

  • Arranging business insurance

  • Making applications for finance

  • Acquiring equipment, stock or a premises

  • Organising any business licences

  • Consulting advisors

In order to demonstrate this requirement has been satisfied, you will have to show that some of the activities above have been conducted.

Application Process

If you satisfy the criteria mentioned above, you can go ahead and make an application for an ABN. When applying you will need to provide some information about yourself and your business. This can include:

  • Your Tax File Number

  • Details of your main business activities

  • Previously held ABN

  • Legal name of the entity

  • Contact details

  • Business locations

  • Your tax agent number

  • Date your ABN is required

It’s also important to be aware that if your business structure is a company, you will need an Australian company number (ACN) before receiving an ABN.


It’s fair to say that if you’re starting a new business, it’s in your best interest to apply for an ABN. The potential complications that can be avoided by having an ABN make the process worth your time.

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