ACN vs ABN: What’s the Difference and Which One Do You Need?

Are you starting a new business in Australia and wondering whether you need an ACN or an ABN? Both of these registration numbers are essential for different.

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ACN vs ABN: What’s the Difference and Which One Do You Need?

31 Mar, 2023 Admin

Are you starting a new business in Australia and wondering whether you need an ACN or an ABN? Both of these registration numbers are essential for different types of businesses, but they serve different purposes. In this blog post, we’ll explain the difference between ACN and ABN so that you can decide which one you need for your business.

ACN (Australian Company Number)

ACN stands for Australian Company Number, and it is a unique nine-digit number assigned by the Australian Securities and Investments Commission (ASIC) to companies operating in Australia. An ACN is required for any company that wants to conduct business in Australia, including proprietary limited companies, public companies, and foreign companies.

The ACN is used to identify your company to the government, suppliers, and customers. It is also used to register for an Australian Business Number (ABN). When you register for an ACN, you will be given a certificate of registration that proves your company’s legal existence.

ABN (Australian Business Number)

ABN stands for Australian Business Number, and it is a unique eleven-digit number assigned by the Australian Business Register (ABR) to businesses operating in Australia. An ABN is required for any business that wants to register for Goods and Services Tax (GST), claim tax credits, or invoice customers.

The ABN is used to identify your business to the government, suppliers, and customers. It is also used to register for other business taxes such as Pay As You Go (PAYG) withholding and Fringe Benefits Tax (FBT).

The Difference between ACN and ABN

The main difference between ACN and ABN is their purpose. ACN is used to identify a company to the government, suppliers, and customers, while ABN is used to identify a business to the government, suppliers, and customers.

ACN is required for any company that wants to conduct business in Australia, while ABN is required for any business that wants to register for GST, claim tax credits, or invoice customers.

In summary, ACN is a registration number for companies, while ABN is a registration number for businesses. If you’re starting a new business, you will need to register for an ABN. If you’re setting up a company, you will need to register for an ACN and an ABN.

Conclusion

In conclusion, understanding the difference between ACN and ABN is crucial for any business operating in Australia. While they serve different purposes, both of these registration numbers are necessary for different types of businesses. If you’re unsure which one you need, seek advice from a tax professional or contact ASIC or ABR for guidance.

At Tax Savers, we have a team of experienced tax accountants who can help you navigate the complex Australian tax system. Contact us today to find out how we can assist you with your tax and accounting needs.

Frequently Ask Questions

As a sole proprietor, you do not need an ACN, but you will need to register for an ABN if you want to claim tax credits, register for GST, or invoice customers.

No, you cannot use the same number for both. The ACN is a nine-digit number, while the ABN is an eleven-digit number. However, you can use your ACN to register for an ABN.

The processing time for an ACN or ABN application varies, but it usually takes around 1-2 business days for the ASIC or ABR to process the application.

The fees for registering an ACN or ABN vary depending on your business structure and the type of registration you require. As of March 2023, the fees for registering an ACN are AUD 506, while the fees for registering an ABN are free of charge.

Yes, you can apply for an ABN without an ACN. However, if you have a company, you must have an ACN before you can register for an ABN.

No, you do not need to renew your ACN or ABN registration. Once you have been assigned an ACN or ABN, it remains the same for the life of your business.

No, you cannot use your ACN or ABN for any other purpose besides tax and business registration. It is a unique identifier assigned by the government for these specific purposes only.

If you fail to register for an ACN or ABN when required, you may be subject to penalties or fines. Additionally, you may be unable to conduct business in Australia or register for important business taxes and benefits.