Small business establishment legislation in Australia
Starting a new small business in Australia can be exciting and overwhelming all at the same time. It is important that new small business owners understand government laws and regulations to ensure they can operate legally without ramifications.
Once the business structure* is determined, it is a legal obligation that all business owners must register the business name before commencing any business activity in Australia. The ASIC (Australian Securities and Investments Commission) is the Australian Government body responsible for registering business names. All online businesses require a domain name to be registered, which can be accessed through https://www.auda.org.au/
*The most common business structures are sole trader; partnership; company; and trust
Small business owners will need to understand and comply with government taxation regulations. Outlined below are the most common taxes that small businesses may need to register for.
TFN (tax file number) required
All business types require a TFN. If the business owner is starting as a sole trader, they can keep their individual TFN. Any partnerships, company or trusts need to register for a separate TFN for the business.
ABN (Australian Business Number) optional
An ABN (Australian Business Number) is a unique 11-digit number that allows the government and community to identify your business. It is not mandatory for businesses to register an ABN, however, in doing so; it will make registering for other taxes easier in the future (i.e. GST). ABN’s can be obtained through the Australian Business Register website here https://abr.gov.au/
ACN (Australian Company Number) required for companies
The ASIC will issue your business an ACN if your business is registered as a company. Before applying for an ABN, your business must apply for an ACN first.
GST (Goods and Services Tax) required for most businesses
If your business expects to turnover AU $75,000 or more, registering your business for GST is a legal business requirement. Any invoices sent to your customers will need to include a GST component once your business is registered for GST.
There are also other businesses taxes such as PAYG (pay as you go) and Payroll tax for those businesses that pay salaries or wages. More information can be found through the ATO website https://www.ato.gov.au/
Different licences, registrations, permits and certificates may apply by Australian national, state, territory and local governments. The Australian Business Licence & Information Service (ABLIS) is available to help determine which laws are applicable to your business (https://ablis.business.gov.au/pages/home.aspx).
To find out more about the laws that surround establishing a new small business in Australia, visit https://www.business.gov.au/info/plan-and-start/start-your-business/business-and-company-registration/registration-and-licences