Many Australian business owners are still confused about whether or not to register their business with the Australian Business Number (ABN). However, there are many good reasons why business owners should register their businesses.
Businesses that do not get their ABN might have trouble with taxes, while those who have an ABN can claim Goods & Services Tax (GST) and fuel credits.
Getting an ABN is very easy. There are third-party companies who are very willing to help you get your ABN as soon as possible.
As of June 2020, more than 2.4-million trading businesses were counted actively operating in Australia. They are one of the main driving forces of the country’s economy. Despite the COVID-19 pandemic, there has been a significant increase of 2.0% in the number of active businesses; rather, about 46,651 newly-established businesses in Australia, most of which are properly registered. So does your business need ABN? To put it simply, ABN is Australia’s official business registration, and there are several benefits to registering your business. To learn why it’s important to register a company in Australia, read the rest of this article.
- Limited Tax Liability
Registering your business can help you pay less tax if you fall under a certain company structure. In Australia, the highest current tax rate for businesses is very low compared to that of individuals. As a small business owner, you will only be taxed as an individual with additional income from your business. Furthermore, your business might also be entitled to a wide range of tax exemptions, including repairs, maintenance, training, advertising, and education.
- Minimises the Chance of Conflict with Business Partners
Registering your business can help you greatly whenever conflict arises among your business partners or co-founders. When you register your business, you can set ownership rights based on the number of shares you own. Therefore, the more shares you own in the business, the higher chance you can control it solo. Registering your business will make your business partners fully understand their investment better than verbal or written agreements.
- Brand Awareness & Legitimacy as a Business
One of the most important reasons why you should register your business is for building trust with your customers. Popular brands and companies are all registered businesses. For a small business like yours, you must register your company to build brand awareness and introduce your brand as legitimate.
Your brand will also be held accountable to the ASIC and works under the Australian Company Number’s tutelage (ACN).
- You Can Improve Your Capital Significantly
As a registered business, it will become easier for you to get business deals with new investors, making it easier for you to raise capital for future business ventures. It is important to register a company in Australia so that the business owner is qualified for business loans either from the government or bank. It will surely improve your equity capital, so if you have other business structures, it will be easier for you to develop and expand them when your business is registered.
Final Thoughts
Lower tax rates, brand awareness, and improved equity capital are just a few entries on a very long list of benefits your business will enjoy when you register it. As a responsible business owner, registering your business should be the most basic first step in taking care of your business.
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