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  • Examples of business registrations

    The following examples show the types of registrations a business may need:

    Example: Registration for a sole trader

    Nguyen is a qualified electrician. He starts his own part-time business, doing jobs on customer premises and at his workshop. Some of his business details are:

    • Business structure: sole trader
    • Expected turnover: $40,000 per year
    • Staff: works alone.
    End of example
    Initial business registrations for Nguyen

    ABN, yes.

    ABN

    Nguyen registers for his ABN online at the Australian Business RegisterExternal Link (ABR). He can easily do his business name registration at the same time.

    TFN, no.

    TFN

    As a sole trader, Nguyen uses his individual TFN. He doesn't need a separate TFN for his business.

    Online services, yes.

    Online services

    By registering for a personal myGov account and linking it to the ATO, Nguyen can do tax transactions for his business online. He can do this using our Online services for individuals and sole traders.

    GST, no.

    GST

    The expected GST turnover from his business is less than $75,000 so Nguyen doesn't have to register for GST. He decides not to register, which means he can't charge GST or claim GST credits. He can register later if he needs to.

    PAYG instalments, yes.

    PAYG instalments

    Nguyen can voluntarily enter into pay as you go (PAYG) instalments to start paying his income tax by instalments throughout the year. This will help him avoid having to pay a big tax bill after he lodges his first tax return.

    PAYG withholding, no.

    PAYG withholding

    Nguyen plans to work alone, with no employees. He can register later if he needs to.

    Fringe benefits tax, no.

    Fringe benefits tax

    Nguyen has no employees.

    Business name, yes.

    Business name

    Nguyen can register his business name 'Nguyen's All Electrical' on the Australian Business RegisterExternal Link when he registers for an ABN.

    Later, Nguyen decides to put more time into his business. He expects his business sales to increase to $90,000 per year.

    Adding GST registration

    GST, yes.

    GST

    Nguyen's projected GST turnover is now $75,000 or more, so he must register for GST within 21 days of when he starts putting more time into his business. Nguyen will then charge GST on his sales, and will be entitled to claim GST credits for any business purchases that include GST.

    Example: Registration for a company

    Renee starts her own clothing shop. At the same time she creates a company, Renee Fashions Pty Ltd, through which she runs the business. Some of her business details are:

    • Business structure: company
    • Expected turnover: $190,000 per year
    • Staff: three (including Renee).
    End of example
    Business registrations for Renee Fashions Pty Ltd

    ACN, yes.

    ACN

    Before doing her tax registrations, Renee must register her company with Australian Securities & Investments Commission External Link(ASIC) and obtain an Australian company number.

    ABN, yes.

    ABN

    The company needs an ABN as it must register for GST. Renee does her ABN registration online at the Australian Business RegisterExternal Link (ABR). If she wants to, Renee can also register for her business name and other tax registrations at the same time.

    TFN, yes.

    TFN

    The company needs a separate TFN.

    myGovID or Manage ABN Connections or AUSkey, yes.

    Secure online authentication

    To do the company's tax transactions online, Renee needs a secure way to verify her business identity online such as myGovID and Relationship Authorisation Manager (RAM)

    Renee can also use AUSkeyExternal Link or Manage ABN Connections, however these services will retire at the end of March 2020.

    Online services, yes.

    Online services

    Renee can do tax transactions for her business online using online services.

    GST, yes.

    GST

    The company must register for GST because its expected annual GST turnover is more than $75,000.

    PAYG instalments, yes.

    PAYG instalments

    Renee can voluntarily enter into the pay as you go (PAYG) instalments system to start paying her income tax by instalments throughout the year. This will help her avoid having to pay a big tax bill after she lodges her first tax return.

    PAYG withholding, yes.

    PAYG withholding

    As an employer, Renee Fashions Pty Ltd will need to withhold tax from wages and must register for PAYG withholding.

    Fringe benefits tax, yes.

    Fringe benefits tax

    Renee plans to have private use of a company car, which is a fringe benefit.

    Business name, yes.

    Business name

    Renee can register the company's business name on the Australian Business RegisterExternal Link when she registers it for an ABN.

    Last modified: 10 Dec 2019QC 31804