Starting a Business in Australia

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

An ABN (Australian Business Number) is the identifier every business needs to operate in Australia, regardless of structure. It’s free to apply for through the Australian Business Register, and you use it to invoice clients, register for GST, and deal with the Australian Taxation Office. An ACN (Australian Company Number) is different: it’s issued by ASIC only when you register a company, and it identifies the company as a separate legal entity. A sole trader or partnership needs an ABN but never needs an ACN. A company needs both — the ACN identifies the entity, the ABN identifies it to the tax system.

For most first-time business owners in Australia, the ABN is the only number they’ll deal with, because most first businesses start as sole traders.

Which business structure should you choose?

The structure you choose determines your liability, your tax treatment, and how much paperwork you carry. There’s no single right answer — it depends on how much risk the business carries, whether you have partners, and how you plan to grow.

Structure	Liability	Setup complexity	Tax treatment	Best for
Sole trader	Unlimited — personal assets are exposed	Lowest — ABN only	Business income taxed at your personal rate	Solo operators, freelancers, testing an idea
Partnership	Unlimited, and shared between partners	Low — ABN plus a partnership agreement	Income split and taxed at each partner’s personal rate	Two or more people going in together
Company (Pty Ltd)	Limited to the company’s assets	Higher — ACN, ABN, ASIC registration, annual review	Flat company tax rate; profits taxed again if distributed as dividends	Businesses carrying real risk, or planning to raise capital
Trust (family or discretionary)	Depends on the trustee — limited if the trustee is a company	Highest — trust deed, trustee, ongoing compliance	Income distributed to beneficiaries and taxed at their rates	Asset protection and flexible income distribution across a family group

A sole trader structure is the fastest way to start trading and the easiest to wind up if the idea doesn’t work. A company costs more to set up and run — including an annual review fee to ASIC, which is indexed and published on the ASIC website — but it separates your personal assets from business debts, which matters as soon as you’re signing contracts, hiring staff, or carrying stock. Trusts are worth discussing with an accountant rather than setting up from a template; the tax and asset-protection benefits are real, but the compliance overhead isn’t justified for a business that hasn’t proven itself yet.

Many businesses start as a sole trader and convert to a company once revenue and risk justify it. That conversion is straightforward and common — it isn’t a sign you got the first decision wrong.

Do you need to register for GST?

GST registration becomes compulsory once a business’s turnover reaches, or is expected to reach, $75,000 in a 12-month period. Below that threshold, registration is optional — some businesses register voluntarily anyway, because it lets them claim GST credits on business purchases and can make the business look more established to larger clients and suppliers. Once registered, you charge GST on top of your prices, lodge Business Activity Statements, and remit the GST you’ve collected to the ATO, minus any GST credits on your own purchases.

Get this wrong in either direction and it costs money: register late past the threshold and you may owe GST on sales you didn’t charge it on; register unnecessarily early and you’ve added a compliance obligation with no revenue to justify it.

Do you need to register a business name?

If you trade under any name other than your own personal legal name (for a sole trader) or your company’s registered legal name, you need to register that business name with ASIC. Trading as “Jane Smith” needs no registration; trading as “Smith Consulting” does. Registration is separate from — and doesn’t replace — your ABN, and it’s also separate from trademark protection, which is a different process entirely if you want to stop competitors using a similar name.

Where a professional network changes the outcome

The structural decisions above are the same on paper for every business owner in Australia. What differs from one founder to the next is everything around them: which accountant actually understands a business like theirs, which industries have licensing quirks nobody mentions until you hit them, and whether a bank or landlord takes a first-time applicant seriously without an established trading history or credit record.

This is where a professional network changes the outcome more than any government guide can. Persian Business Club exists partly because these decisions are easier with people who’ve already made them — members who’ve set up the same structure, worked with an accountant who understands the realities of running a business in Australia, and can tell you honestly what worked and what didn’t. A referral to the right adviser, made by someone who’s used them, is worth more than another checklist.