New business owners frequently mix up ABN and ACN, assuming they’re just two names for the same thing. However, they serve different purposes and apply to different business structures. Understanding the difference early avoids confusion during registration.
An Australian Business Number (ABN) is an 11-digit identifier. The ATO and other government agencies use it to identify your business for tax and other dealings. Consequently, almost every business regardless of structure needs an ABN to invoice clients, register for GST, and interact with the ATO as a business.
An Australian Company Number (ACN) is a 9-digit number. ASIC issues it specifically to companies when they register. Therefore, an ACN only applies if your business structure is a company sole traders, partnerships, and trusts don’t have one.
An ABN identifies your business for tax purposes, and virtually every business structure requires one. An ACN, on the other hand, identifies a company as a distinct legal entity, and only companies receive one. Consequently, if you operate a company, you’ll actually have both an ACN and an ABN your ABN often takes the ACN and adds two extra digits.
Sole traders and partnerships need an ABN but will never have an ACN, since these structures aren’t separate legal entities.
Companies receive an ACN from ASIC upon registration, then apply for an ABN using that ACN as the base.
Trusts generally need an ABN in the name of the trustee, and won’t have an ACN unless the trustee itself is a company.
Using the correct number in the right context matters. For example, invoices generally need to display your ABN, while certain legal and company documents require your ACN specifically. Therefore, understanding which applies where avoids compliance issues down the track, particularly as a company structure grows.
Assuming you automatically get an ACN. Registering for an ABN alone doesn’t create a company or issue an ACN. That only happens through formal company registration with ASIC.
Using the wrong number on documents. Some contracts, tenders, or legal documents specifically require an ACN, and an ABN alone won’t satisfy that requirement for a company.
Forgetting ongoing obligations. A company with an ACN carries ongoing reporting obligations to ASIC, separate from the tax reporting tied to your ABN. Keep both up to date.
Your business structure determines which numbers you need, and how they interact. Therefore, it’s worth confirming this before registering rather than after, particularly if you’re planning to eventually transition from a sole trader to a company structure.
EBATS helps new and growing businesses register correctly the first time, with clear guidance on exactly what’s required for your structure.
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