ABN vs ACN: what's the difference?

Two numbers, two regulators

business.gov.au: Register for an Australian Business Number (ABN) covers who can apply and how. ASIC: Australian Company Number (ACN) is the ASIC position on the company number. Neither is a substitute for the other, and a company normally holds both at once.

Why a sole trader can't have an ACN

An ACN exists only because a company is registered as a separate legal entity under the Corporations Act. A sole trader is not a separate entity — you are the business, you use your own tax file number, and you are personally responsible for the debts and obligations. There is no company, so there is no company number, and no application you can make to get one.

A company gets its ACN when it is registered with ASIC — ASIC: Register a company sets out that process. business.gov.au: Business structures sets out the alternatives if you are weighing up whether to incorporate. The short version is that a company costs more to run and has its own reporting obligations, in exchange for limited liability and a different tax treatment. Choosing a structure is a decision worth taking to an accountant rather than a webpage.

The relationship between them

For a company, the two numbers are related: a company's ABN is built on its ACN plus two leading check digits. ABN Lookup (Australian Business Register): Format of the ABN explains how the 11 digits are formed, including the check-digit calculation that makes a correctly formed ABN verifiable — that is the arithmetic behind the ABN format checker.

That relationship is why a company can often display its ABN in place of its ACN on documents. It is also why a company's ABN and ACN look similar but are not interchangeable: the ACN is the nine digits in the middle, and the ABN is the whole eleven.

Which number goes where

For everyday trading, the ABN is the one that matters:

• On tax invoices. If you are registered for GST, your ABN has to be on every tax invoice you issue — ATO: Tax invoices lists it as a required detail. A customer who cannot see your ABN cannot claim the GST credit.
• When a business pays you. If you do not quote an ABN for a payment that requires one, the payer generally has to withhold tax from the payment at the top rate. Quoting the ABN is what avoids that.
• On company documents. An ACN has to appear on public company documents such as the common seal, letterheads and public notices — a requirement that applies to companies, not to sole traders.

A sole trader with an ABN and a company with both numbers are both compliant; the difference is simply which regulator issued what.

Checking a number you've been given

Two different checks are useful, and they answer different questions:

1. Is this number correctly formed? The check-digit algorithm in ABN Lookup (Australian Business Register): Format of the ABN will tell you. The ABN format checker runs it in your browser — a typo in one digit usually fails immediately.
2. Is this business actually registered? Only ABN Lookup can answer that. A correctly formed number proves nothing about whether it is active, who it belongs to, or when it was registered.

That distinction matters when you are checking a new supplier. A number that passes the arithmetic is a well-formed number; a number that passes ABN Lookup is a registered business. Being asked to pay against a well-formed ABN that turns out not to be active is a common shape of small-business fraud, and it costs nothing to check both.

If you are setting up and trying to decide whether you need a company at all, start with How to apply for an ABN as a sole trader — the ABN is the step that comes first in either case.