ABN vs ACN: The Difference, and Which One You Actually Need
Reviewed by Patrick Sargent CA, Registered Tax Agent 25758613·Published 1 August 2026 · Last reviewed 2 August 2026·5 min read
ATO late lodgement penalty: up to $364 per 28 days, capped at $1,820 per document · interest 11.43% p.a. compounding daily · See how to remit them →
The registration alphabet, decoded
ACN, ABN and business name compared
ACN
ABN
Business name
Issued by
ASIC, at incorporation
The ATO, via the ABR
The ASIC business names register
Who has one
Companies only
Any entity in business: sole traders, partnerships, trusts and companies
Anyone trading under a name that is not their own or their company's
What it is
The company's legal identity, which exists even if it never trades
Your key into the tax system: invoicing, GST, PAYG and dealing with other businesses
A label. No entity, no protection, no tax status, and the most misunderstood item on this table
What it protects
The company's separate legal personality, meaning limited liability with caveats
Nothing. It is an identifier, not a shield
Nothing. Registering Smith's Plumbing creates no company and no liability wall
ACN, ABN and business name compared
The practical stack: a sole trader needs an ABN, plus a business name if not trading under their own name. A company gets an ACN at birth, then registers its own ABN to trade. A trust trades through the trustee, so the ABN belongs to the trustee in that capacity, which is why corporate trustee structures show a company's details on trust invoices.
Where it goes wrong in practice
Switching structures switches numbers. Going from sole trader to company creates a new entity: new ABN, new GST registration, new everything, with contracts, invoices and software all re-papered. The old ABN does not transfer. It gets cancelled, with its own final lodgment tidy-up.
Frequently asked questions
What's the difference between an ABN and an ACN?
The ACN is a company's legal identity from ASIC. The ABN is the tax-system registration from the ATO that any business entity needs to trade.
Do I need both an ABN and an ACN?
Only if you run a company. It has an ACN automatically and needs an ABN to trade. Sole traders and partnerships need only an ABN.
Does a business name give me any legal protection?
None. It is a registered label. Liability protection requires an actual company with an ACN.
What happens if I invoice without an ABN?
The payer must withhold 47% of the payment, which is recoverable only through your tax return.
Is my old ABN still active?
Check ABN Lookup. Inactive ABNs are cancelled by the registrar, and invoicing on a cancelled number is a compliance problem worth five minutes of prevention.
General information only - not personal tax, financial or legal advice. Consider your own circumstances or speak to a registered tax agent. Remission of penalties or interest and payment plans are decisions of the ATO and outcomes can't be guaranteed.
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