Business registration in Australia is not one form – it is a handful of separate registrations that apply depending on how you set up. That is where most new business owners get confused: an ABN, an ACN, a business name and a company registration all mean different things, and not every business needs all of them. Here is what actually applies to you, in plain terms.
Key Takeaways
- An ABN (Australian Business Number) is free, applies to almost every business structure, and is usually the first registration step.
- An ACN (Australian Company Number) only applies if you register a company (Pty Ltd) with ASIC – sole traders and partnerships do not have one.
- Registering a Pty Ltd company costs $636 through ASIC (from 1 July 2026), plus an annual review fee of a few hundred dollars to keep it registered.
- GST registration becomes compulsory once your turnover reaches $75,000 a year ($150,000 for non-profits), though you can register voluntarily below that.
- Your choice of business structure affects your personal liability, tax treatment, and how much admin you take on – it is worth getting right the first time rather than restructuring later.
Choosing a Business Structure
This decision comes before any registration and shapes everything that follows:
- Sole trader. The simplest structure – you operate under your own name or a registered business name, report business income on your personal tax return, and are personally liable for business debts. No separate legal entity, and registration is free beyond the ABN.
- Partnership. Two or more people running a business together, sharing income, losses and liability. A partnership agreement is not legally required but is strongly recommended to avoid disputes later. The partnership needs its own TFN.
- Company (Pty Ltd). A separate legal entity with its own tax obligations and limited liability protection for directors and shareholders. This is the most common structure for businesses planning to grow, raise capital, or take on meaningful risk.
- Trust. More complex, often used for asset protection or tax planning, and generally set up with professional advice given the ongoing compliance involved.
ABN vs ACN: What Is the Difference
This is the single most common point of confusion, and the distinction is simpler than it sounds:
- ABN (Australian Business Number) – an 11-digit number issued by the ATO. Almost any business structure can have one: sole traders, partnerships, companies and trusts. It is used for invoicing, tax, and dealing with other businesses. Applying is free through the Australian Business Register.
- ACN (Australian Company Number) – a 9-digit number issued by ASIC, but only when you register a company. Sole traders and partnerships do not have an ACN. If you register a Pty Ltd, ASIC issues the ACN first, and you then use it to apply for the company’s own ABN and TFN.
Step-by-Step: Registering Your Business
- 1. Decide your structure (sole trader, partnership, company or trust), since this determines which registrations you actually need.
- 2. Apply for your ABN through the Australian Business Register (abr.gov.au), free of charge. For a company, this comes after ASIC registration.
- 3. Register with ASIC if setting up a company. You will need a proposed company name, a registered office address (a physical address, not a PO box), director and shareholder details, and the share structure. The fee is $636 from 1 July 2026. ASIC issues your ACN on approval.
- 4. Register a business name if you plan to trade under a name different from your own (for a sole trader) or the registered company name.
- 5. Register for GST once your turnover reaches, or is expected to reach, $75,000 a year. This can be done at the same time as your ABN application or later through the ATO.
- 6. Open a dedicated business bank account, which most banks require an ABN for and which makes bookkeeping and tax time considerably simpler.
Ongoing Costs to Know About
Registration is not a one-off cost if you choose a company structure. Pty Ltd companies pay an annual review fee to ASIC (a few hundred dollars, due on the company’s registration anniversary) to remain registered, plus the ordinary compliance obligations that come with running a company: annual tax returns, quarterly BAS if registered for GST, and superannuation contributions for any employees.
Frequently Asked Questions
Do I need an ABN if I am just freelancing or doing occasional gig work?
If you are running your own business rather than working as an employee – including freelancing, contracting, or gig economy work – you generally need an ABN to invoice clients correctly and manage your own tax. Without one, businesses paying you may be required to withhold a higher rate of tax from payments.
Can I change my business structure later?
Yes, many businesses start as a sole trader or partnership and move to a company structure as they grow. This usually involves new registrations rather than simply updating the existing ones, so it is worth planning the change with an accountant.
Is a company always better than being a sole trader?
Not necessarily. A company offers limited liability and can be more tax-effective at higher profit levels, but it comes with more ongoing compliance and cost. Many small, lower-risk businesses operate perfectly well as sole traders.
How long does registration actually take?
An ABN is often issued instantly online if your details match ATO records. ASIC company registration can typically be completed online in as little as a few hours to a few business days once you have all the required details ready.
This guide is general information only and current as of 2026. Registration fees and thresholds are set by the ATO and ASIC and do change – confirm current figures on the ATO and ASIC websites, or with an accountant, before registering.
