Sole Trader ABN Registration Process

Starting out as a sole trader? Then getting a sole trader ABN (your Australian Business Number) should be at the top of your list of priority list. The unique 11-digit number (yep, an ABN is a unique identifier) tells the ATO, other businesses, and your customers who exactly they’re dealing with.

It also helps with the more admin-heavy stuff like invoicing, tax registrations, setting up other business registrations like GST and more.

What an ABN actually means

An ABN means you’re operating as a business or enterprise, and you can use that number on payments and invoices to identify yourself to both clients and suppliers.

It’s not the same as a tax file number, and it’s not a business name. If you trade under a name that isn’t your personal name, you’ll need to register a business name separately. For this, you’ll need to deal with the Australian Securities and Investments Commission’s (ASIC) business name register.

Check eligibility before you apply

Not every business is entitled to an ABN. You need to have an active business or take real steps towards starting one. The government can review you at any time and ask for evidence that you’ve commenced (or are actively preparing to commence) your proposed business activity.

It’s also worth knowing that if you apply for an ABN, register for GST, or claim refunds when you’re not entitled, you could face serious consequences, like fines or worse.

What you’ll need for your ABN application

When you’re ready to apply for an ABN, you’ll be asked to have all the details ready about your business structure (i.e. sole trader), your identity, your planned activities and more.

To help make life easier for you, here’s a quick checklist to follow:

• Your personal details and proof of identity. Your tax file number will help the ATO verify you faster.
• Your business details: what you do, how you’ll earn money, start date, where you operate, etc.
• If relevant, details of any other workers you’re employing, as well as any prior ABN or other business registrations.

How to register for an ABN

The standard way to register for an ABN is online via the Australian Business Register (ABR), which is in constant communication with the ATO. Thankfully, the process itself is pretty straightforward:

1. Start the ABN application online with the Australian Business Register and give your details (sole trader, identity, activities, contact information).
2. Review everything and complete the declaration.
3. Submit all your info and keep your confirmation page for your records.

What happens after you submit?

Once the ABR verifies you, you should receive your ABN immediately. If the ABR needs to do a few checks, you might get a reference number while your application is under review. If you’re not eligible, you’ll get a refusal number and an explanation.

Be aware that some applications may take longer if they require manual review, so don’t panic if it doesn’t happen instantly.

Keep your ABN details up to date once you’re registered

After you register, it’s on you to keep your ABN details current. If your business details change, you’ll be expected to update them, including if you change address, have new contact details, or make major changes to what your business does.

Also, if you change your business structure (e.g. moving from a sole trader to a company), you might need to get a new ABN.

ABN vs business name vs ACN (company)

There are key differences between your ABN, business name, and Australian Company Number (ACN). This is where many new sole traders get tripped up.

• ABN: Identifies your business to the ATO and others.
• Business name: What you trade under (registered with ASIC).
• ACN: If you register a company, ASIC issues an Australian Company Number.

As a sole trader, you’re the only owner, and you’re legally responsible for the business. That’s why it’s usually the easiest and cheapest business structure to start with, but at the same time, it means you’re responsible for all aspects of the business, including tax and compliance.

Getting an ABN as a sole trader in a nutshell

It’s not hard to get an ABN as a sole trader, but it’s also something you have to take a bit of time on to do properly. Your Australian Business Number is the basis for making quotes, invoices, client onboarding, and the tax side of running your business.

Once it’s live, staying on top of updates and getting registered for things like the goods and services tax (GST) will save you a lot of headaches with the ATO down the track.