• Is the entity entitled to an ABN?

    Companies, partnerships, trusts and other organisations

    Not all entities are entitled to an Australian business number (ABN) . To be entitled to an ABN the entity must meet either criterion 1 or criterion 2.

    Criterion 1 

    The entity is entitled to an ABN if it is a:

    •   company incorporated under the Corporations Act 2001 (Cth) in Australia
    •   charitable institution or trustee of a charitable fund in Australia
    •   deductible gift recipient in Australia
    •   religious institution in Australia
    •   superannuation fund
    •   government entity.

    Criterion 2 

    The entity is entitled to an ABN if the following statements apply:

    • its activity is carried out in the:
      • form of a business
      • nature of trade, or
      • form of a regular or continuous grant of a lease, licence or interest in property
    • its activity is carried out in Australia or it makes supplies that are connected with Australia
    • its activity is not a private recreational pursuit or hobby.

    For partnerships where all or most of the partners are individuals, a reasonable expectation of profit must apply.

    If the entity does not meet criterion 1 or 2 it is not entitled to an ABN. 

    Individuals (sole traders)

    If you are an individual applying for an ABN, check your entitlement to register here.

    You are entitled to an ABN if all of the following statements apply. 

    • Your activity is carried out in the:
      • form of a business
      • nature of trade
      • form of a regular or continuous grant of a lease, licence or interest in property.
    • Your activity is carried out in Australia or you make supplies that are connected with Australia.
    • You have a reasonable expectation that a profit will be made from your activity.

    You are not entitled to an ABN if any of the following statements apply. 

    • Your activity is carried out as an employee or in connection with earning payment as a company director, office holder or under a labour hire arrangement.
      An employee is a person who receives a salary or wage in return for work or services rendered.

      You are not considered an employee for ABN registration purposes if:
      • you have your own business but also receive a salary or wage from an activity related to your business
      • your activity is a private recreational pursuit or hobby.
      • your activity is conducted as a member of a local government body, for example, as an elected member of a city, town or shire council.

    The following examples will also assist you to determine your entitlement to an ABN:

    Is a non-trading company entitled to an ABN?

    Under A New Tax System (Australian Business Number) Act 1999 (ABN Act), a body registered as a company under the Corporations Act 2001, is entitled to an ABN even if it is non-trading.

    Is a company in liquidation, receivership, administration or controlled by another party entitled to an ABN?

    Under the ABN Act, a company registered under the Corporations Act 2001, is entitled to have an ABN even if it is an incapacitated entity.
     

    Is a bankrupt (individuals only) entitled to an ABN?

    Individuals are entitled to an ABN providing they are carrying on an enterprise in Australia under subsection 8(1) ABN Act.


    For trustees appointed to administer bankrupt individuals on or after 1 April 2002, the trustee will no longer be able to use the ABN of the individual. They will have to apply for a new ABN which will be used for all matters arising under the administration.

     

    Is a non-resident entity of Australia entitled to an ABN?

    There are circumstances where a non-resident entity can have an ABN. An example of this is when making supplies connected with Australia in the course of carrying on an enterprise. The main difference is in providing the proof of identity at registrations (POI) of a non-resident entity, as the entity behind the ‘entity’ can’t always be established. More information may be needed before a non-resident can be registered for an ABN. The Registrar will contact you if more information is needed.

     

    For more information about the type of documents that may be required, refer to Proof of identity - for individuals and businesses resident outside Australia.

    Are joint ventures entitled to an ABN?

    Some joint ventures will not involve the establishment of a separate entity and these non-entity joint ventures are not eligible to apply for an ABN.

    Non-entity joint venture means an arrangement that the Registrar is satisfied is a contractual arrangement:

    • under which two or more parties undertake an economic activity that is subject to the joint control of the parties
    • that is entered into to obtain individual benefits for the parties, in the form of the output of the arrangement rather than joint or collective profits for all parties.

    However, some joint ventures can apply to be GST joint ventures. Each application will nominate an entity to be the joint venture operator. The joint venture operator is then:

    • liable for the GST on any taxable supplies
    • entitled to the input tax credits on any creditable acquisitions made by the joint venture operator on behalf of the joint venture participants arising out of the activities for which the joint venture was entered into.

    To discuss entitlement to an ABN, you can phone us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.

    When applying for an ABN it is important that the information you provide is true and correct.

    Making a false or misleading statement to the Australian Business Register (ABR) may result in a penalty.

    However, if you made a mistake and we consider that you took reasonable care, a penalty will not apply. The penalty may also be reduced to nil if a voluntary disclosure is made about the statement before being contacted by the ABR. 

     For more information on the penalty and voluntary disclosure, refer to Penalties for false or misleading statements made to the Australian Business Register. 

    The electronic version of this document is the only authorised version.
    Last updated: 18/12/2012


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