It is not a difficult task to set yourself up as a sole trader and it usually does not even cost you anything except in case you use third party. To become a sole trader you will need to take the first step, which is registering for an Australian Business Number (ABN) that is a unique 11 digit number issued to all entities registered in the Australian Business Register.
When you get an ABN, then you can use the ABN to start doing business or freelance jobs. A registered ABN however doesn’t prevent you from working as an employee (PAYG) or a contractor if you wish to do so or operate under a trading name. Being a sole trader registered with an ABN number you will only have to complete one tax return that is more or less like the PAYG employee. When you are comparing between the choice of registering as an ABN sole trader and setting up a company (ACN), it can be helpful to read How To Start A Business In 11 Steps (2024 Guide).
Content Outline
Do I need to get an ABN?
If you are an individual trader who earns more than $75,000 in self employment each year then it is compulsory for you to have both the ABN and also to be registered under GST . However, even if you earn less than $75,000 a year it is worthwhile to apply for an ABN as well.
Obtaining an ABN also simplifies the identification of your business making it less likely to be confused with other businesses having similar names. Furthermore, if you want to register your business name nationally, an ABN is required and it will guarantee that no one will come up with the same business name. Furthermore, if you do not have an ABN, any payment from other business that required to withhold 47% of the payment. But an ABN makes you free from this requirement.
Setting up your ABN
To set up your Sole Trader ABN, you need to meet the following criteria: You are the sole owner of the business and therefore legally accountable for all facets of the business including liabilities. This will not prevent you from hiring other workers but you cannot employ or hire yourself as the employee.
The application is done online via the website of the Australian Business Register , which isn’t hard or long if you know all your data sput to answer questions provided. Below, we’ve compiled a handy list of items you’ll need. However, you may not possess or require all of this list as it might not apply to your business.
- Tax File Number (TFN)
- Professional Adviser number
- Had an ABN in the past
- Australian company number (ACN) or Australian registered body number (ARBN) if applicable
- The date you expected to start use of your ABN to do business and it must not exceed more than 6 months from the day of application
- Entity legal name
- Tax or BAS agent contact if you engage one
- For business contact information, it should include your physical address, postal address, email and phone number. Make sure that your email contains your name and does not start with such prefixes as ‘admin@’ or ‘hello@’.
- Business of nature and a brief description
- Business location.
FastLane Group provides specialized business setups, maintenance and accounting services for your company registration needs. Let us take the hassle of complex accounting off you while you soar on the entrepreneurial plane. Get in touch with us today for efficient and trustworthy company incorporation services coupled with the best business solutions. This is the beginning of your business growing with FastLane Group.