How to register a business name and ABN, in the right order

Three things get set up in the first week of most Australian businesses, and owners often do them in the wrong order: the ABN, the name and the bank account. Do them in the right order and each one makes the next painless. Do them out of order and you can end up paying for a name you can’t use yet, or with a bank account in a name that doesn’t match your tax registration.

This guide walks through what each registration does, what it costs, what it doesn’t give you, and why your lender will care about the details years from now.

What is the difference between an ABN, a business name and a company?

These get mixed up constantly, so it helps to separate them.

• An ABN (Australian Business Number) is an 11-digit identifier for dealing with the tax office and other businesses. It belongs to you or your entity. It isn’t a licence, and having one doesn’t, by itself, prove you’re running a real business.
• A business name is simply a label you trade under. It’s registered with ASIC, belongs to no one in a legal sense, and exists so the public can look up who’s behind the name.
• A company (with an ACN) is a separate legal entity that you form through ASIC. It’s the structure itself, not just a label, and it can hold assets and borrow under its own name.

An example makes it concrete. Priya runs a bike repair business. She is a sole trader with an ABN in her own name. She trades as “Spoke & Sprocket”, so she registers that business name against her ABN. A year later she incorporates a company, “Spoke & Sprocket Pty Ltd”, gets an ACN and a new ABN for the company, and moves the trading across. The old business name has to be updated or re-registered against the new entity, because the owner of the name has changed.

If you’d like a deeper look at the ABN and ACN terms, see our glossary entries on the ABN and ACN.

What should you decide before you register anything?

Registering is quick. Undoing a wrong decision is not, so spend a day on these four questions.

1. What structure? Sole trader, partnership, company or trust. The choice affects tax, liability and how lenders view you. A sole trader’s debts are personal debts. A company’s debts generally belong to the company, though directors often give personal guarantees to lenders. Talk to your accountant first.
2. What name? Search ASIC’s register for identical names, then check the domain, social handles and trade mark databases yourself. A free ASIC registration will happily go through for a name that infringes someone else’s trade mark.
3. Who owns the name in a partnership or trust? The registration is held by an individual, partnership or entity that must match the ABN holder.
4. Will you register for GST? Businesses turning over $75,000 or more in GST turnover must register (higher for non-profits), and many choose to register earlier so they can claim GST credits on start-up costs.

How do you get an ABN?

The application is free and done online through the Australian Business Register. You’ll need your tax file number, identity details and a description of your business activity. Many applications are approved immediately; some are held for checks and take a few days.

You’ll be asked whether you’re entitled to an ABN. In short, you must be carrying on or starting an enterprise in Australia. A hobby or a one-off sale of a personal item doesn’t qualify. If the ABR isn’t satisfied, it can refuse the application or later cancel the number.

Two details worth knowing:

• Never pay a website to “register your ABN”. Commercial lookalike sites exist and charge fees for something the government does at no charge.
• Payers who don’t get an ABN from you may withhold tax. When a business pays an individual for work and no ABN is quoted, the payer is generally required to withhold tax from the payment at the top marginal rate plus the Medicare levy. You can claim it back in your return, but it can wreck a small contractor’s cash flow in the meantime.

Once you have it, check your own listing on ABN Lookup. The entity name, entity type and GST status shown there should be correct, because customers, suppliers and lenders look you up.

How do you register a business name with ASIC?

Once you have an ABN (or an application reference number), you can register a name through ASIC. The steps run roughly like this:

• Search ASIC’s register to check the name isn’t identical to an existing one and isn’t restricted (some words, such as “bank” or “university”, are protected).
• Apply online, using your ABN. You’ll need a service address and a principal place of business in Australia.
• Choose a term of one year or three years and pay the fee. ASIC reviews and updates its fees from time to time, so confirm the current amount on its site.
• Receive confirmation. The name appears on the public register, linked to your ABN.

The Business Registration Service lets you apply for an ABN and the name together, which saves you stitching two sessions together. If you’re forming a company at the same time, the company’s registered name is separate, and you only need a business name if you trade under something different.

Renewal and lapse

Names don’t last forever. They expire at the end of the term, and you must renew or the registration is cancelled. ASIC sends reminders to the contact details it holds, which is why an old email address is the most common reason owners lose a name. Put the expiry date in your calendar, and check the contact details after any change of address or email.

A lapsed name goes back into the pool, and a competitor or a stranger can register it. Losing a trading name after years of building a customer base is an avoidable tragedy.

What doesn’t a business name protect?

This is the part owners most often get wrong. According to ASIC, registering a business name does not stop others using similar words, does not protect you from claims if you infringe someone’s trade mark, and does not guarantee the name complies with other laws. Some state and territory rules restrict names that imply a regulated profession. ASIC won’t refund the fee if another body stops you using the name.

If the name is the main asset of your brand, speak to an IP lawyer about a trade mark with IP Australia. It’s an extra cost, and it’s the only registration that gives you exclusive rights over the name in the classes of goods and services you apply for.

What else should you set up straight after?

With the ABN and name in hand, work through the next steps in this order.

1. Bank account. Banks want your ABN and entity details. See our business banking basics for the accounts worth having from the start.
2. GST, if required or wanted. You can register on the same ABN application or later.
3. PAYG withholding and super, once you hire staff.
4. Licences and insurance for your trade or industry, which vary by state.
5. A record system. Even a simple spreadsheet of sales and expenses beats a shoebox, and cloud accounting software makes BAS far less painful.
6. An email address and domain in your business name. Lenders and customers notice consistency.

Setting up and already eyeing finance for stock or equipment? Ask what a lender could realistically offer while you’re organising the rest.

None of this has to be perfect in week one. It does have to be correct, because the same names and numbers will appear on invoices, contracts, loan applications and tax lodgements for as long as you trade.

Why do lenders care about your ABN and name?

Lenders verify who they’re lending to before anything else. They check the ABN and ACN against public registers, look at the entity type, and note how long the ABN has been active. Several things can slow a file down:

• A trading name that doesn’t appear anywhere on the ABN record.
• An ABN registered to a sole trader while the bank statements are in a company’s name, or the other way round.
• An ABN that has been cancelled and reinstated.
• GST status on ABN Lookup that disagrees with the BAS you supply.

The age of the ABN matters too. Many lenders have minimum trading periods, and some options are available to newer businesses while others aren’t. Our pages on business loans with an ABN under six months and sole trader business loans explain what to expect, and when to take on your first business loan helps you judge whether borrowing is the right call yet.

If you’re still working out how to fund the start-up phase, how to fund a startup in Australia covers the options beyond a bank loan.

Common slip-ups to avoid

• Registering the name before the structure is final. If you’ll incorporate in six months, a company name and a business name are different things. Plan the sequence.
• Using someone else’s brand. A registration isn’t a defence. Search trade marks first.
• Letting the contact email lapse. ASIC’s renewal notice then goes nowhere.
• Leaving GST status undecided. If you cross the threshold and don’t register on time, you may owe GST you never charged customers.
• Operating under a name that isn’t registered. Trading under an unregistered name can breach the rules, and it makes contracts, invoices and loan paperwork messy.
• Mixing up the ACN and ABN on documents. They are different numbers, and lenders read both.

When the paperwork is done and the money is the question

Registering is the easy end of starting a business. The harder end is funding stock, equipment or the first slow quarter. If you’ve been trading a while and want to see what finance might fit, we’re happy to look at it with you.

The enquiry is a short form that takes around a minute, and asking doesn’t leave a mark on your credit file. We don’t pass your details around to a long list of lenders; one specialist reads what you’ve written and calls you to talk it through. Use the real figures and the real trading history when you fill it in, and the first option we suggest is much more likely to be the right one.

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