- Your business structure determines if you need ABN or ACN, or both. Sole traders, partnerships, and trusts only need an ABN. Register a company and you need both: your ACN comes first from ASIC, your ABN follows from the ATO, and you cannot legally trade without both in place.
- For tax purposes, your ABN does all the work. It is your identifier for GST, BAS, PAYG, invoicing, and every interaction with the ATO. Your ACN has no direct tax function; its role is to establish and identify your company as a separate legal entity.
- When you move from sole trader to company, your existing ABN does not transfer. Your new company gets its own ACN and a new ABN derived from it. The two entities are legally separate from day one.
If you’re starting a business in Australia, you’ll quickly come across two key acronyms: ACN and ABN.
They sound similar, are often used together, and are one of the most common points of confusion for new business owners.
Here’s the short answer:
- ABN (Australian Business Number): identifies your business for tax and commercial purposes
- ACN (Australian Company Number): identifies your company as a separate legal entity
If you’re a sole trader, you only need an ABN.
If you’re registering a company, you’ll need both and there’s a specific order to get them.
This guide breaks down ACN vs ABN in simple terms. By the end, you’ll know exactly which one you need, when you need both, and how to get set up correctly.
If you are a sole trader planning to incorporate, do not cancel your existing ABN before registering your company. Your personal ABN stays with you as an individual and remains separate from your new company's ABN. Cancelling it prematurely creates unnecessary gaps in your tax history.
What’s the difference between an ACN and ABN in Australia?
An Australian Business Number (ABN) is an 11-digit number issued by the ATO through the Australian Business Register. It identifies your business for tax and commercial purposes, including GST registration, PAYG, invoicing, and claiming tax credits.
An Australian Company Number (ACN) is a 9-digit number issued by ASIC under the Corporations Act 2001 (Cth). It identifies your company as a separate legal entity, distinct from its directors and shareholders.
The key difference comes down to scope:
- ABN: used for tax, transactions, and day-to-day business activity
- ACN: used to identify and track a registered company legally
Not every business has both.
- Sole traders, partnerships, and trusts can have an ABN only
- Only registered companies receive an ACN (and they also need an ABN)
ACN vs ABN comparison: Key differences explained
Aspect | ACN | ABN |
Full name | Australian Company Number | Australian Business Number |
Issued by | ASIC | ATO / Australian Business Register |
Legislation | Corporations Act 2001 (Cth) | A New Tax System (ABN) Act 1999 |
Who gets it | Registered companies only | Any business entity |
Number of digits | 9 | 11 |
Format | ACN XXX XXX XXX | XX XXX XXX XXX |
Cost | Included in company registration ($611) | Free |
Purpose | Identifies the legal company entity | Identifies the business for tax and commercial dealings |
Required on | Invoices, contracts, letterheads, ASIC filings | Invoices, contracts, tax documents |
Can it change? | Never | Can be cancelled; new one applied for |
Expires? | No | No, but can be cancelled for inactivity |
Do you need an ACN, an ABN, or both?
Understanding which number you need comes down entirely to your business structure.
Business type | Needs ABN | Needs ACN |
Sole trader | Yes | No |
Partnership | Yes | No |
Trust | Yes | No |
Company (PTY LTD) | Yes | Yes |
Not for profit company | Yes | Yes |
Freelancer/Contractor | Yes | No |
Here’s what that means in practice for each structure:
- Sole trader: You operate as an individual, there’s no separate legal entity to identify, so no ACN is issued. An ABN is all you need to invoice clients, register for GST, and deal with the ATO.
- Partnership: The partnership holds an ABN for the business. Individual partners may also hold their own ABNs. No company exists in this structure, so no ACN is involved.
- Trust: The trust itself holds an ABN. If you’ve appointed a corporate trustee, a Pty Ltd company set up specifically to act as trustee, that company has its own ACN and ABN. These are separate identifiers for separate entities. This is one of the most commonly misunderstood structural points when setting up a discretionary trust.
- Pty Ltd company: Both always. Your ACN is issued by ASIC at registration; your ABN is applied for immediately after, usually in the same transaction through the Business Registration Service. You cannot legally trade, invoice clients, or open a business bank account without both.
- Not-for-profit company: Same rules as a for-profit Pty Ltd. Registered with ASIC means an ACN is issued; an ABN is required separately for tax purposes.
When does a business need both an ACN and ABN?
The short answer: If you’re registering a company, you need both.
There’s no scenario where a company operates legally with just one.
- The ACN establishes your company’s legal identity
- The ABN allows it to trade, invoice, and meet tax obligations
3 common situations where you need both an ACN and ABN
1. Starting a new company
If you’re setting up a company from scratch, you’ll need both numbers before you can operate.
- Your ACN is issued first when ASIC approves your registration
- Your ABN is then applied for, usually in the same process
In most cases, you’ll receive both within a few hours of lodging your application.
2. Moving from sole trader to company
If you’re currently a sole trader, you already have an ABN but it doesn’t transfer.
When you incorporate:
- Your company gets a new ACN
- It also gets a new ABN (linked to that ACN)
- Your existing ABN stays with you personally
This separation often catches founders off guard.
3. Setting up a trust with a corporate trustee
In this structure, you’re dealing with multiple entities:
- The trust has its own ABN
- The corporate trustee (Pty Ltd) has its own ACN and ABN
These are legally separate, even though they work together.
Getting this wrong during setup can create costly compliance issues later especially around tax reporting and ownership structure.
Do you apply for an ACN or ABN first?
For companies, the answer is always ACN first, ABN second.
- You cannot obtain a company ABN without an ACN, because the ABN is mathematically derived from it.
- There is no shortcut or workaround, ASIC must issue your ACN before the ATO can issue your company’s ABN.
In practice, the Business Registration Service lets you apply for both in a single online transaction. But the sequence is fixed:
- You register your company with ASIC
- ASIC issues your ACN
- You apply for (and receive) your ABN through the ATO
For most online applications with all information correct, both numbers can be confirmed within hours.
For sole traders, there is no ACN involved at all.
Apply directly for an ABN through the Australian Business Register, it’s free and typically processed within minutes if your identity is verified through myID.
Having an ACN does not mean your company is automatically active or compliant. ASIC can deregister a company for failing to pay the annual review fee, even if the business is still trading. Always verify a company's registration status on ASIC Connect before entering a contract, not just its ACN.
ACN vs ABN: Which one actually affects your tax in Australia?
When founders ask about ACN vs ABN, tax is usually the underlying concern: which number matters for GST, invoicing, and dealing with the ATO? The table below breaks down exactly where each number sits in your tax obligations.
Aspect | ACN | ABN |
Tax role | Indirect, establishes the legal entity that tax obligations belong to | Direct, your primary identifier with the ATO for all tax dealings |
Not used | Required to register for GST once turnover exceeds $75,000 annually | |
Not used | Required on every Business Activity Statement lodged with the ATO | |
Not used | Required to set up and manage PAYG withholding for employees | |
No-ABN withholding rule | Not applicable | If a supplier does not quote an ABN, businesses generally must withhold 47% of the payment and remit it to the ATO, unless an exception applies (such as payments of $75 or less excluding GST, hobby/private transactions, or other ATO exemptions). |
Tax rate | Registering a company subjects it to the corporate tax rate. The rate is 25% if the company qualifies as a base rate entity (aggregated turnover under $50 million and less than 80% or less passive income), and 30% for all others. Status is assessed annually. | Does not determine tax rate, applies across all business structures regardless of how they’re taxed |
Tax return | Not used directly | Company lodges its tax return under its ABN, linked back to the legal entity identified by its ACN |
Invoicing | Not a tax identifier, can’t be used alone on invoices | Required on all invoices; omitting it triggers the 47% no-ABN withholding rule for the payer |
ATO dealings | No direct ATO function | Used for all correspondence, payments, and registrations with the ATO |
The simplest way to remember it: your ACN creates the entity, your ABN runs it. Every tax obligation your company carries is fulfilled through its ABN but it all traces back to the legal entity your ACN established.
What are the common ACN vs ABN mistakes Australian business owners make
1. Using your ACN where your ABN is required
Suppliers, clients, and the ATO all expect your ABN for invoicing and tax dealings. Your ACN alone won’t be accepted, it’s not a tax identifier. Always use your ABN for commercial and tax transactions.
2. Assuming your sole trader ABN carries over to your new company
It doesn’t. A registered company is a separate legal entity and gets its own ABN derived from its new ACN. Your personal ABN remains yours as an individual, the two don’t merge or transfer.
3. Applying for a company ABN before the ACN exists
The ABN is derived from the ACN, so you cannot obtain a company ABN without registering the company first. Attempting to do so will result in a rejected application. Register the company, get the ACN, then apply for the ABN, ideally in the same BRS transaction.
4. Skipping the ABN after getting the ACN
Some founders register their company, receive their ACN, and assume that’s enough to start operating. It isn’t. Without an ABN your company cannot issue valid invoices, register for GST, or deal with the ATO. Both numbers need to be in place before you trade.
A trust does not receive an ACN even if it has a corporate trustee. The ACN belongs to the corporate trustee company itself, not to the trust. These are two separate legal entities with two separate sets of compliance obligations.
Need help registering your ACN and ABN correctly?
If you are at the stage of understanding ACN vs ABN, you are likely about to register a company or set up your business structure for the first time. Here is exactly where Sleek fits into that process.
- Company registration: We handle your ASIC company registration end-to-end, so your business is ready to launch without delays.
- Ongoing ASIC Compliance: From annual reviews to lodgements, we help keep your business compliant and avoid unnecessary penalties or missed deadlines.
- All-in-one business support: From accounting and tax to bookkeeping and payroll, get your finances and ATO obligations on track, all under one roof.
- Transparent Pricing: Every service comes with clear, upfront pricing. No hidden fees, no surprises.
Ready to get started? It starts with registering your company and Sleek makes that the easiest part of launching your business.
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Frequently Asked Questions
Do I need both an ACN and ABN to run a company in Australia?
Yes always. The ACN establishes your company’s legal identity with ASIC; the ABN enables it to operate commercially and meet its tax obligations with the ATO. Neither replaces the other, and you cannot legally trade as a company without both.
What happens to my ABN if my company is deregistered?
When a company is deregistered, both the ACN and ABN become inactive. The company ceases to exist as a legal entity and can no longer trade, invoice, or enter contracts. The ACN remains on the ASIC register as a historical record, but neither number can be used for active business purposes after deregistration.
How long does it take to get an ABN and ACN?
For most applicants, an ABN is typically issued immediately for straightforward online applications where identity is verified through myID, though some applications are referred for further review and may take up to 20 business days.
An ACN is issued by ASIC once your company registration is approved, which typically takes a few hours for online applications with all information correct, though it can take up to 48 hours in some cases.
The good news for company founders is that both can be applied for in a single transaction through the Business Registration Service meaning your ACN and ABN can both be confirmed within one business day.
