How Many ABNs Can You Have in Australia
Written by Bindi Gethen
Recently, Australia has become a magnet for new businesses. The data supports this trend. In 2023, more than 400,000 new businesses set up their shop in the land down under. The credit for this growth goes to the ease of doing business in Australia.
One of the key elements of running your business smoothly in Australia is getting an Australian Business Number, or ABN for short. Think of it as your unique ID that the government and everyone else use to know you’re legit. You need it for virtually every aspect of your business, from dealing with taxes to invoicing.
But there are many doubts about ABN, one of them being – “How many ABNs can you have?” Knowing who can get it, how to manage it, and if you can have more than one ABN is necessary to run your business smoothly. This knowledge can help you make informed decisions and avoid potential penalties or legal action.
Let’s walk you through it.
Can I Have More Than One ABN?
The ABN is linked to the structure rather than the business name. You cannot have more than one ABN for a single business entity in Australia. In short, there is no need to get multiple ABNs for one person registered as a sole trader. You can run more than one sole trading business under the same ABN.
Eligibility for ABN Registration
You need to tick a few boxes to get an ABN, starting with who is eligible to apply for it. The short answer is – every business, small or big!
The Goods and Service Tax (GST) threshold for businesses in Australia is annual turnover of $75,000. However, you may still need an ABN even if you earn below the GST threshold. Keep this in mind when applying for an ABN.
Next, you must be running the business. You can be a sole trader, a partnership, a company, or a trust. You need to provide details about your business – like what kind of business it is, its location, and what you (plan to) sell or do.
You also need your Tax File Number (TFN). Whether you’re an individual or a business, you need this. These steps are designed to ensure only real businesses can get ABN. However, the rules for registering multiple ABNs keep changing. Be sure to consult a professional first.
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Understand ABN Rules for Multiple Businesses
Let’s say, you’re a wedding cake maker registered as a sole trader. You are also a photographer. Although these are two different businesses, they have a common legal structure – you are a sole trader. In this case, you can register them under one ABN.
On the other hand, if one of your businesses has a different legal structure, you need a new ABN. Let’s say your wedding cake business is registered as a sole trader. However, your photography business is a partnership with one of your mates. In this case, you need to register the photography business with a new ABN.
That’s because a partnership has a different legal structure. It will be taxed differently than a sole trading business. The laws for registering multiple ABNs can be tricky and update regularly. Be sure to consult a professional to understand if you need more than one ABN.
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Updating and Cancelling Your ABN
Just like your personal details, your ABN information also needs to be up to date. It helps everyone know your business is active. Updated ABN also keeps all your tax and other transactions in order.
1. Updating Your ABN
Let’s say you move your business to a new location or change its name. You need to update these details on your ABN. The same goes for changing your phone numbers or other business details.
Updating your ABN is pretty simple. You can do it online through the Australian Business Register (ABR) website. It’s a free and quick process.
Pro tip
You need to update the details within 28 days of any changes.
2. Cancelling Your ABN
You don’t need to cancel your ABN if you are changing location, phone number, or business name. But you need a new ABN if the legal structure of your business changes. That means you need to officially close the old business with ABR and register the new one when it’s ready.
Let’s say, you had a pet grooming business as a sole trader. But the time has come for you to expand into a partnership with your friend Sam, who has a ton of experience in grooming our furry friends. It’s a step up for you and Sam both.
But since you and Sam are joining forces, your new pet grooming business has become a partnership. It’s a different legal structure than your former sole trading business. So, you need to officially close your old business and cancel the ABN linked to it.
You can cancel your ABN online through the ABR website. Alternatively, you can do it via phone or rope in an authorised tax agent to complete the process. Of course, you need to sort out your taxes and Pay as You Go (PAYG) instalments before cancelling your ABN.
Next, you need to apply for a new ABN for your partnership. Once your old ABN cancellation comes through and the new ABN gets issued, update your business information on other government agencies like ATO. Also, inform your vendors and customers about this change.
Frequently Asked Questions
Usually, there is no need to have multiple ABNs for one person registered as a sole trader. However, you need a new ABN for businesses with different legal structures.
Yes, having multiple ABNs can make tax reporting more complex. Each ABN may require separate tax filings. It also adds to your paperwork.
Yes. Incorrectly registering for multiple ABNs can lead to grave legal consequences. You may lose your income, pay hefty fines, and might even face potential prison time. Consult a professional before registering for multiple ABNs.
Yes, a sole trader can typically use one ABN for all their businesses as long as they are not legally separate entities.
To get a second ABN, you must justify the need for it. Also, talk to a professional like a tax agent or business lawyer. They can help you understand the legal and tax implications of getting a second ABN. You can apply for it through the Australian Business Register like you did the first time.
Keep Your Business Running Smoothly
Whether you are getting a new ABN or cancelling an old one, your books need to be balanced. You’ve to pay all your outstanding taxes and debts and lodge activity statements first. That’s where we can help you. Our skilled team knows how to balance your books to the last penny. That, in turn, helps you efficiently cancel your old ABN or apply for a new one.
The Bookkeeping Studio can help you keep everything ready when the time comes. Our bookkeeping packages are tailored to meet your unique business needs.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
