Help with ABN application

I've got a business idea and need some help with planning and costing etc, but a guy from Austrade says I need an ABN for him to be able to help me move forward. He's been really helpful so far in a general sense, so I'd like to be able to work with him. I've started to fill out the online ABN application but I'm stuck re 2 things:

1) the entity- sole trader or company. Can anyone give me brief overview of options re this? It would be just me initially but I may pull in hubby and others to help later on.

2) the nature of the business. There's a drop down menu where you need to select what the business will do. I'm still at the planning stage though and have a couple of different options. Is it easy to change the nature of the business after getting the ABN from selling one product to another, for example?

 

Ha.

I gave up on this and paid someone to navigate that painful site.

Good luck

 

Ah, I did see some companies will do it for a fee. Now I know why! Have you got a recommendation?

 

1. Sole trader is quick and cheap to register, this is where the you are the company basically.
Company costs more and takes longer to register and is separate from yourself basically.

To view more details:
Difference between a sole trader and a company | business.gov.au

2. Nature of business doesn't matter.

 

Thanks Nick. Is it easy to change the nature of the business if costings lead to a change of plan?

Is it a reasonable idea to start as sole trader and move to a company if needed later on?

 

I'm not sure of the process to change from sole trader to company. Would need some input from an accountant.

But considering that it is fast and almost 0 cost to run as a sole trader it is reasonable.
Depending on what sort of business you will run, you may need company structure for limited liability.

 

I would seek professional help with this. A lot depends on what you're planning to do. A sole trader and a company are two very different structures each with their pros and cons. If this is a serious business idea, I wouldn't be hasty.

The type of business may be able to be changed later on, but the structure (Sole trader/company) may not be as easy. Speak to your accountant about your plans and they can advise the most suitable structure for your needs.

 

Having just changed a business structure for one business and as a result, an ABN, I'd strongly recommend getting it right from the start. Even it it takes more time or costs a bit extra, IMO, we'll worth it. Having to go through all the rigmorale did my head in and it's still not sorted yet.

 

That's great advice, thanks!

 

No worries. To expand - can't transfer an ABN so have to apply for new one in a new entity, transfer biz name (which involves canceling and re-registering), updating insurances, banking accounts (needed to open new ones in our case), depending on the biz and merchant terminals and how clients pay then advising them of new banking details, invoicing, quoting and probably other stuff I haven't realised yet and probably only will when something goes wrong.

And to think I could get this sorted in 1 BAS quarter so there'd be minimal overlap, ha!

 

I guess it depends on how complex the business is. If for example someone is selling paintings, then canceling a sole trader ABN and registering a company would be quite straightforward as you are only really collecting income for yourself.

 

That's what I thought too....

 

Keep in mind the CGT and stamp duty implications of transferring a business too.

 

So glad I asked this question!

 

My accountants have done it each time

 

Registering an ABN in and of itself is a very simple process.

Deciding on the structure that you wish to register under is somewhat more complex and depending on project growth/size of the business as well as the industry would result in very varied best outcomes.

If you're not sure what structure suits you already then you're a prime candidate to be best suited seeking professional advice. There are both legal and tax consequences to be considered when deciding a structure and you need to decide (and if a company/trust, register) before you can apply for the ABN.

 

I decided this task is safer in the hands of my accountant. Thanks everyone.

 

Depends on state and when. After 1 July there may be zero CGT and in some states zero duty too. eg NSW.

 

SA too has no stamp duty on sale of businesses as of June 2015

 

Unfortunately NSW still has duty on the sale of a business, s11 Duties Act. Furthermore even if the business is based in another state, such as SA where duty has been abolished, NSW duty could still apply if that business supplies goods or services in NSW.

But this duty on busineses is due to be abolished 01 July 2016.