What Is the Difference Between an ABN and an ACN, and Do I Need Both?

When starting a business in Australia, two important numbers often cause confusion: the Australian Business Number (ABN) and the Australian Company Number (ACN). Both are issued by government authorities and play vital roles in business identification, taxation, and compliance. However, they are not the same, and understanding their differences can save you time, money, and legal headaches.

This article explains what each number means, who needs them, how they work together, and when you might need both.

 

Understanding the ABN (Australian Business Number)

The Australian Business Number (ABN) is a unique 11-digit identifier issued by the Australian Business Register (ABR) and managed by the Australian Taxation Office (ATO).

Every business that operates in Australia — whether it’s a sole trader, partnership, trust, or company — needs an ABN to legally trade and interact with government systems.

Key purposes of an ABN:

1. Tax identification: It helps the ATO track your business activity for Goods and Services Tax (GST) and income tax reporting.

2. Invoicing: You must include your ABN on tax invoices if you charge or claim GST.

3. Business credibility: An ABN helps customers and suppliers verify your business on the ABN Lookup website.

4. Avoiding PAYG withholding: If you supply goods or services and don’t quote your ABN, the payer must withhold 47% of your payment for tax purposes.

5. Registering for GST: You cannot register for GST without an ABN.

Who needs an ABN:

You must have an ABN if you are:

• Running or starting a business in Australia;

• Making supplies connected with Australia (selling goods or services);

• Acting as a contractor or freelancer; or

• Importing or exporting goods.

If you’re just earning hobby income or occasional sales without a business structure, you generally don’t need an ABN.

 

Understanding the ACN (Australian Company Number)

The Australian Company Number (ACN) is a unique 9-digit number issued by the Australian Securities and Investments Commission (ASIC).

It applies only to registered companies under the Corporations Act 2001 — not to sole traders or partnerships.

Key purposes of an ACN:

1. Legal identification: The ACN identifies your company as a separate legal entity.

2. Company registration: You must have an ACN before obtaining an ABN for a company.

3. Regulatory compliance: ASIC uses your ACN to monitor your company’s legal obligations, including annual reviews, financial reporting, and director details.

4. Official documentation: You must display your ACN (or ABN if it includes the ACN) on all company documents — invoices, contracts, websites, and business correspondence.

5. Protecting your liability: A company with an ACN provides limited liability protection to its directors and shareholders, separating personal assets from business debts.

Who needs an ACN:

You need an ACN if you decide to register your business as a company, such as:

• A proprietary limited company (Pty Ltd);

• A public company; or

• A not-for-profit or limited-by-guarantee company.

If you’re a sole trader or partnership, you don’t need an ACN.

 

Main Differences Between ABN and ACN

 

Do You Need Both an ABN and an ACN?

That depends on your business structure.

• Sole traders, freelancers, and partnerships:
  You only need an ABN. You operate under your own name or business name, not as a separate legal entity.

• Companies (Pty Ltd):
  You need both an ACN and an ABN.
  The ACN is automatically included in your ABN. For example, your ABN may start with two check digits followed by your 9-digit ACN.

In simple terms:

Every company has both an ACN and an ABN, but not every business with an ABN has an ACN.

 

Example Scenarios

Example 1: Freelancer Graphic Designer

Sarah is a freelance designer operating as a sole trader. She applies for an ABN to invoice clients and register for GST once her income exceeds $75,000 per year.
She does not need an ACN, because she isn’t running a registered company.

Example 2: Tech Startup Founder

Mark creates a technology startup and registers it as BrightByte Pty Ltd with ASIC.
He receives an ACN when the company is formed. Then, he applies for an ABN using that ACN.
Now, BrightByte Pty Ltd has both numbers and must include them on all invoices and official documents.

 

Benefits of Registering as a Company (and Getting an ACN)

While registering as a company involves more costs and paperwork, it can offer major benefits:

• Limited liability protection for owners and directors

• Easier access to funding and investment

• More professional image for larger clients and tenders

• Ongoing existence, even if ownership changes

• Tax advantages, depending on your income and structure

However, companies also face stricter compliance rules, including:

• Annual ASIC review fees

• Director reporting obligations

• Company tax returns separate from personal ones

 

How to Apply for an ABN or ACN

Step 1: Decide on Your Business Structure

Before applying, determine whether you’ll operate as a sole trader, partnership, trust, or company. This affects whether you need an ACN.

Step 2: Register an ACN (if applicable)

If you’re setting up a company:

• Visit asic.gov.au

• Choose a company name and check availability

• Pay the registration fee

• Receive your ACN immediately after approval

Step 3: Apply for an ABN

Once you have your structure (and ACN if needed):

• Go to the Australian Business Register website

• Complete the online form (it’s free)

• Receive your ABN instantly or within a few days

 

Displaying Your ABN and ACN

Australian law requires transparency.
You must display your ABN and/or ACN on:

• Tax invoices and receipts

• Company letterheads and business cards

• Websites and marketing materials

• Official contracts and correspondence

If your ABN includes your ACN, you don’t have to list both separately, but it’s often recommended for clarity.

 

Summary and Key Takeaways

• ABN (Australian Business Number) identifies your business for taxation and GST purposes.

• ACN (Australian Company Number) identifies your company as a separate legal entity registered with ASIC.

• Sole traders and partnerships need only an ABN.

• Companies need both an ACN and an ABN.

• You can apply for both online through ASIC and the Australian Business Register.

• Display both numbers on your invoices and official documents to stay compliant.

Understanding the difference between an ABN and an ACN ensures you set up your business correctly from day one — avoiding penalties, protecting your assets, and building a trusted professional presence.