ABN and ACN: what are they and what's the difference?

Starting a business in Australia is an exciting milestone, but the abbreviations that come along with registering your business can be overwhelming. While every step of business registration is important in ensuring you meet tax, legal and regulatory obligations, two of the most important terms to know are the ABN and ACN numbers.

Although they might look similar on a tax invoice, they serve very different legal and tax purposes. Understanding the distinction is key to staying compliant with the Australian Taxation Office (ATO) and the Australian Securities and Investments Commission (ASIC). This guide breaks down exactly what these numbers are, how they differ, and which one your business actually needs.

What is an ABN (Australian Business Number)?

An ABN (Australian Business Number) is a unique 11-digit number that identifies your business to the government and the community. It is mandatory for any entity carrying on an enterprise in Australia, including sole traders, partnerships, and companies. This number is issued by the ATO and needs to be accompanied by a registered business name.

Why you need an ABN:

• ‍Tax invoices: You must include your ABN on every invoice you issue. If you don't, other businesses are legally required to withhold 47% of their payment to you for tax purposes. This is known as "no-ABN withholding" and can cause cash flow issues for a new merchant.
• ‍GST claims: You need an ABN to register for Goods and Services Tax (GST) and claim back input tax credits.‍
• Professional identity: It allows you to register a .com.au domain name and open a business bank account.

Having an ABN helps to ensure you have the right administrative information in place to gain access to tools that will help you manage and grow your business.

What is an ACN (Australian Company Number)?

An ACN (Australian Company Number) is a unique 9-digit number issued by ASIC when you register a company. Unlike an ABN, which almost every business needs, an ACN is specific to the corporate structure.

If you choose to operate as a Proprietary Limited (Pty Ltd) entity, the ACN is proof that your company is a separate legal entity from yourself.

Why you need an ACN:

• ‍Legal incorporation: It is the formal certification of the incorporation of your company. It proves to banks, investors, and the courts that the business has a life of its own. This separation is what provides a critical layer of asset protection. Because the company is a separate entity, the personal assets of the directors are generally protected from the company’s liabilities and debts.‍
• Applying for an ABN: If you are a company, you must get your ACN first, as your ABN will be derived from it (usually by adding two check digits to the front).

For ACN numbers, it's legally required to be displayed on all public documents and eligible negotiable instruments. This includes:

• Business letterheads and official notices.
• Invoices and receipts.
• Cheques, promissory notes, and bills of exchange.
• The common seal (if the company has one).

Having an ACN also shifts your business into a different regulatory tier. Companies pay a flat corporate tax rate and must lodge annual reviews with ASIC.

An ACN signals to the market that you are a sophisticated operation willing to meet these higher standards of compliance and reporting.

ABN vs. ACN Number: Key differences

While both numbers are key identifiers for Australian businesses, they serve different regulatory functions.

The most immediate difference is their length and origin: an ABN consists of 11 digits and is managed by the ATO to track tax obligations. On the other hand, an ACN is a 9-digit number issued by the ASIC, acting specifically as a legal certificate of incorporation.

The requirement for these numbers also depends heavily on your business structure. An ABN is a universal requirement for nearly everyone conducting business in Australia, including sole traders, partnerships, and trusts.

An ACN, however, is exclusive to companies; if you haven’t registered a "Proprietary Limited" (Pty Ltd) structure, you will not have an ACN. Essentially, the ABN identifies what the business does for tax purposes, while the ACN identifies what the business is as a legal entity.

Finally, your obligations for displaying these numbers differ under Australian law. Your ABN must be clearly quoted on all tax invoices to ensure you receive your full payments and avoid the 47% withholding tax. The ACN must appear on all eligible negotiable instruments and public documents, such as official letterheads, receipts, and even your company's common seal.

By understanding these nuances, you ensure that your business remains transparent and compliant with both the tax office and corporate regulators.

Do I need both?

The answer depends on your business structure:

• ‍Sole traders & partnerships: You only need an ABN. You do not have an ACN because you have not incorporated a company.‍
• Companies (Pty Ltd): You must have both. You register the company with ASIC to get your ACN, and then you use that ACN to apply for your ABN.

Applying for ABN and ACN

You apply for an ABN through the Australian Business Register. An ACN comes from ASIC when you register a company - the two are separate registrations with separate regulators.

The simplest route is the government's Business Registration Service at business.gov.au, which lets you apply for a company (and its ACN), an ABN, a business name and a TFN in one session.

Why these numbers matter for your payments

When you sign up and apply for an EFTPOS terminal with a merchant services provider like KPay, your ABN and ACN numbers are the first things we verify. These numbers aren't just for the taxman; they are essential for:

• ‍Onboarding: We use your ABN/ACN to verify your business's legal existence and ensure we are settling funds into a legitimate account.
• Cost of acceptance and surcharging: From 1 October 2026, surcharging on eftpos, Visa and Mastercard is banned in Australia, with interchange caps falling at the same time. That makes your merchant rate a direct hit to margin rather than something you can pass on.‍
• Security: Linking your payment terminal to a verified ABN/ACN adds a layer of protection against fraud and ensures your business is recognised as a professional entity by major card schemes like Visa and Mastercard.

Getting your details right

While they may seem like interchangeable strings of digits, getting your ABN and ACN numbers right is critical for the seamless operation of your business. Mixing them up on official paperwork can trigger a domino effect of administrative delays.

For example, banks often use automated verification systems; if your ABN doesn't perfectly match the legal entity linked to your ACN, your business account application may be flagged or rejected, stalling your ability to trade. Similarly, during Business Activity Statement (BAS) lodgements, a mismatch can lead to processing errors with the ATO, potentially resulting in delayed GST refunds or unnecessary compliance audits.

Beyond simple paperwork, these numbers define your relationship with the Australian business ecosystem. If you are operating as a company, remember this simple rule of thumb: your ACN identifies your legal structure to ASIC, providing you with the protection of a separate legal entity, while your ABN identifies you to the tax system, ensuring you are recognised as an active participant in the economy.

Ensuring these details are accurate across your invoices, contracts, and payment systems, like KPay Terminal Pro, is the final step in moving from a startup to a sophisticated, market-ready enterprise. By maintaining this distinction, you protect your cash flow, your professional reputation, and your legal standing.

KPay's modern, unified solution for your business success

KPay Terminal Pro offers various features to help your business succeed:

• Accepts 12 major payment methods seamlessly on one portable device
• No subscription fees, annual fees or terminal rental fees
• Same-day settlement gives you faster access to your takings.
• Secure transactions and data points with industry-leading security standards, including PCI DSS, AICPA Soc 1 & 2, and ISO 27001.
• 24/7, 365-day customer support to ensure merchants get up and running quickly should any issues occur.
• Access real-time sales reporting, peak hour analysis, and transaction reconciliation with KPay's Merchant App

With KPay Terminal Pro you can meet your customers' needs for speed, versatility of payment methods, and ensure secure transactions — all with one device.

ABN and ACN FAQs

Where can I find my ABN or ACN details?

To look up your own ABN or ACN - or another company's - use these services:

ABN: The Australian Business Register ABN Lookup service.

ACN: The ASIC company search service.

How can I update or cancel my ABN or ACN?

If there are any changes to your business or if you've decided to end your business, you may need to update or cancel your ABN and/or ACN. Here's how you can do so:

ABN

For any changes or updates to any details associated with your ABN, update your ABN details here. You have to do this within 28 days of making changes to your business.

If you've closed or sold your business, or are no longer operating your business, you can cancel your ABN here.

Any changes to business structure, such as going from a company to a sole trader, can be done through this link. For certain cases, you’ll need to cancel your current ABN and apply for a new one.

ACN

For any update to your ACN or for cancellation, you should consider consulting a professional.