Startup Law

4 Essentials for Starting Up a Business in Australia

Welcome to Australia - where you can't smoke in prison, get drunk at a bar, boo at a sporting game or ride a bicycle without a helmet. Maybe its a just natural expression of colonial and convict roots but Australia sure loves regulation! Here are 4 essentials to starting up a business in Australia.

Registration and Licensing Requirements

Starting up a business in Australia requires an awareness of a number of important government registrations and licenses. You can start by running an online search with the Australian Business Licensing Service (ABLIS) to see registrations and licenses might be applicable to your business type and location. When I ran a search for 'lawyer' practicing in 'Melbourne' I received no less that 55 results. I'd suggest the key ones which would apply to nearly all businesses are:

  • Australian Business Number (ABN) - unless you are engaged in a hobby rather than a business you should register for an ABN. Otherwise withholding tax at 49% will be applied to any payments you receive from other businesses. You will also be unable to register for GST until you have an ABN.

  • Goods and Services Tax (GST) - the rule is that you must register for GST when you become aware your revenue will exceed $75,000 in one year. Below this amount registration is optional. Once you register you must complete Business Activity Statements (BAS) either monthly or quarterly. Whilst this reporting requirement might discourage startups to register for GST until it becomes necessary, remember that once you register for GST you can claim back all GST paid in your business formation expenses. Completing BAS statements also encourage you to establish financial discipline.

  • Tax File Number (TFN) - All businesses require a TFN. You may use your personal TFN as a sole trader or your business will be required to apply for its own TFN in the case of a partnership, company or trust.

  • Pay As You Go (PAYG) - You require this registration in order to withhold tax paid to employees and some contractors and businesses to assist them meet their own income tax liabilities. 

You can apply for an ABN, GST, and PAYG registration yourself for free through the Australian Business Register (ABR). Application for a TFN  on behalf of a business can also be made through the ABR however individuals and sole traders need to apply through the Australian Tax Office (ATO). Or if you prefer  a Registered Tax Agent can take care of these for you. [continue reading here]