What’s the difference between an ABN and an ACN?

Whether you are a local businessperson or you hail from an overseas location, it is helpful to have an understanding of some of the key terms used in relation to Australian businesses and companies. This article will explain what an ABN is and what an ACN is. It will also answer questions such as how to obtain, search for and update them, as required.

Effectively, ABNs are applicable to businesses in all their various forms while ACNs are issued and used only in relation to registered companies.

What is an ABN?

The abbreviation ABN stands for Australian Business Number. It is a unique 11 digit number that is issued by the Australian Taxation Office (ATO). The 11 digit ABN is structured as a 9 digit identifier with two prefix digits. It is used to identify your business to the community at large and the government. It is not the same as, nor can it be replaced by, a Tax File Number (TFN) however, it is used by the ATO to track the activities of your operation and your tax compliance at any given time. All ABN registration data is held by the Australian Business Register (ABR) which is a site maintained on behalf of the Australian Commonwealth by the ATO. Publicly available information relating to ABN registration can be accessed on the ABN Lookup website. All Australian businesses of any type must register for an ABN. If you commence trading without an ABN, the party you supply with goods and/or services must withhold 47% (from 1 July 2017) from their payment to you and send the withheld amount to the ATO. You may obtain more information about the no-ABN withholding rule on the ATO website. Most businesses quote their ABN on their invoice. You can register for an ABN free of charge on the ABR website.*

How do I update my ABN details?

On becoming aware of any amendments to your ABN registration details, you must advise the ABR within 28 days. This includes details such as:

• status of your GST registration;
• address information;
• business owner details;
• contact information.

Note, the following cannot be updated directly through the ABR:

• business names;
• legal names for sole traders and individuals (updated by the ATO);
• legal names for Australian companies (updated by the Australian Securities & Investments Commission (ASIC)).

You do not need to contact the ABR directly in relation to name changes as these types of updates are executed by the ATO and ASIC respectively. On notification of name changes, these government bodies will update the ABR as required.

You can carry out most updates to your ABN registration details online and can find information about how to do so, on the Update your ABN details page of the ABR website.
Keep in mind that you may be required to register a new ABN if you change your business structure.

How long does it take to get an ABN?

You will generally be notified of your ABN online, immediately on completion of your ABN application, so long as you have provided all information required in the application process.

If you withhold any data or, the information you provide cannot be authenticated, your ABN application will be processed manually which can take up to 28 days. If any additional information is needed to complete your application, you will be contacted. You can check the progress of your ABN application at any time via the ABN Lookup or, by calling the ATO.

A letter will be sent to you within 14 days if your application, after review, is approved and processed. The letter will advise you of your ABN and related information. If your application fails, you will also be sent a letter which will provide you with a refusal number, reasons for declining your application and any options you may have for redress.

What is an ACN?

Every Australian company registered under the Commonwealth Corporations Act 2001 is issued with an Australian Company Number (commonly abbreviated to ACN) by the Australian Securities and Investments Commission (ASIC). A company’s ACN is a 9 digit number (most frequently displayed as three groups of three numbers) The number is used as a unique identifier. Your ACN can be located on your company’s Certificate of Registration which is included in the pack of company documents generated and issued to you on the incorporation of your company by a third-party provider. ASIC allows online company registration however, it does not at this stage, provide any company documentation. Your ACN and other information related to the structure of your company including address information, who the officeholders and shareholders of your company are, becomes part of public record and can be located via a search on the Australian Securities and Investments Commission (ASIC) ASIC website.

“A company’s ACN must be on all ‘public documents’ and ‘eligible negotiable instruments’. The items on which it should appear include:

• all documents lodged with ASIC
• statements of account, including invoices
• receipts (which are not machine-produced)
• orders for goods and services
• business letterheads
• official company notices
• cheques, promissory notes and bills of exchange, and
• written advertisements making a specific offer.

A company’s name and ACN must appear on the first page of any documents. The ACN must always be clear, easily readable, and obvious as to which company it belongs to.” (Ref: ASIC: Where the ACN must appear)

How do I update my company details?

In Australia, strictly speaking, we update our company details with ASIC as opposed to updating our ACN which is clearly different to the way an ABN is maintained. You must advise ASIC of changes to the details of your company within 21 days after any change. ASIC does not require a fee for updating the details of your company however, from November 2015, changes to company details must be made online. You need to register to use ASIC’s online services before you can make any changes to the structure of your company. Alternatively, your accountant and/or ASIC registered agent can make changes on your behalf.

In summary, ABNs are essential for any type of trading business in Australia. They are an 11 digit identifier, the data for which is held by the ABR however, they are issued by the ATO. ACNs on the other hand, are only issued to companies registered by ASIC and are a 9 digit identifier. If you are conducting business using a company structure, your business will have both an ABN and an ACN. A company’s ABN will always be comprised of its ACN with a two digit prefix.

If you are establishing a business and would like further information on registering an ABN, company registration and/or, our ASIC registered agent service, feel free to call our office on +61 7 5600 9777 or complete our Contact Us Form.

You may also wish to read our article on “Differences between Australian subsidiaries and registered foreign companies” which discusses Australian Registered Body Numbers (ARBN).

*(John Howard’s Liberal government introduced the ABN on 1 July 2000. It was included as a component of a substantial tax reform, which also saw the introduction of a Goods and Services Tax (GST).)