ABN (Australian Business Number) and Australian Law when selling 'stuff'

[da_ewok]

I was checking something recently and thought oh.......... Australian Business, where is the ABN number?

I checked the site, I checked the domain registration................. NADA (in fact the site was protected by 'whois' which is a privacy cloaking domain registrar.

I dug a little deeper and found this on the ASIC site..........
http://www.asic.gov.au/asic/asic.nsf/byheadline/Australian+Company+Numbers?opendocument#where_acn_not_reqd

If you PLAN on making a profit - you MUST minimum register the business name (even if YOUR name) therefore an ACN (Australian Company Number) is issued. If you wish to claim and charge GST you must also have an ABN (which is essentially the ACN with 2 numbers added to the front)

So........... IF you intend on selling items via your website.............. you MUST list one or the other (ACN/ABN) On paper you must list your ABN on all invoices and other documentation (there are exclusions) but more inclusions than exclusions!

Now going back to that link............ It clearly states "written advertisements making a specific offer which is capable of being accepted (such as by the completion of an order form)."

Which means NO ABN/ACN listed then you MAY be dealing with a bad seller......

My biggest compaint I suppose is that people are hiding behind Domain proxies and think it's perfectly okay (which 90% of the time it is).................... but if selling BE VERY CAREFUL!

[*CountessA*]

It always puzzles me, Ewok, when businesses hide behind cloaked domain registration information.

It also puzzles me when a business does not display its ABN.

The tax invoice/receipt MUST display an ABN, and if one has a merchant account and online payment gateway as a business (even as a sole trader), the website must display the ABN. Failure to do so may result in withdrawal of one's merchant account as well as other nasty consequences.

[*FluffyDuckee*]

So does this mean anyone who sells for profit on Ebay needs to display their ABN on their listing?

[*CountessA*]

It's an iffy one, Fluffy.

I spoke to a representative of Business.gov.au a while back, and the first reply was that no, it wasn't necessary. Something he said made me question him further; did he mean that businesses using eBay as their platform truly didn't need an ABN, or to display an ABN?

At that, he qualified what he'd said. He'd assumed (and apparently it was the general assumption at the time) that people who sold on eBay were primarily doing so like a garage sale - getting rid of their own items, putting things up for auction. After a bit of a discussion, he ended up by saying it should be the case that a PROFESSIONAL seller ought to display his/her ABN on their website/webpage, irrespective of the platform, but that it would probably need to be clarified in the Act.

[da_ewok]

A company's ACN should appear on all of its 'public documents' and 'eligible negotiable instruments' [s.153]. The items on which it should appear include: [/i]
all documents required to be lodged with ASIC;
statements of account, including invoices;
receipts (which are not machine-produced);
orders for goods and services;
business letterheads;
official company notices;
cheques, promissory notes and bills of exchange; and
written advertisements making a specific offer which is capable of being accepted (such as by the completion of an order form).
If a company's name appears on two or more pages of a document or instrument, the ACN must be shown on the first of those pages following the company's name.

Where a number of separate companies are listed on a document (eg, a letterhead) the ACN of each should appear and in such a way that makes clear the company to which each ACN relates.

While there are no specific requirements as to how an ACN should appear on a document, it should be clear, easily readable, and obvious as to the company to which it relates.

The ACN should be identified by the words 'Australian Company Number', or by the abbreviations 'ACN' or 'A.C.N.'.


If your company has an Australian Business Number (ABN), you may use the ABN with your company's name in place of the ACN on company documents and negotiable instruments,


Where the ACN is not required

The items on which the ACN is not required include:
•   packaging and labelling, including envelopes and transport documents;
•   advertisements which do not make a specific offer which is capable of being accepted (such as advertisements which only promote the company and its goods or services in general);

So reading from that an ABN/ACN IS required to be displayed on any site (including ebay) where an offer can be accepted.

[*Brum6y*]

So reading from that an ABN/ACN IS required to be displayed on any site (including ebay) where an offer can be accepted.

I take that as being the requirement for any seller/organisation/business who has been issued with an ABN/ACN.  This particular section refers to the 'Company' entity, which, by definition, will have an ACN.  If you've got one, then you MUST display it in the defined situations.

That citation does not give any direction as to the requirement for any seller/organisation/business to get an ABN/ACN in the first place.

[da_ewok]

Another page deep from the bowels of the ATO:-
http://help.abr.gov.au/content.asp?sid=42&doc=/content/16985.htm&usertype=BC

Individuals (sole traders)
If you are an individual applying for an ABN, you should check your entitlement to register here.

You are entitled to an ABN if all of the following statements are true.

Your activity is carried out in the:
form of a business
nature of trade, or
form of a regular or continuous grant of a lease, licence or interest in property.
Your activity is carried out in Australia or you make supplies that are connected with Australia.
You have a reasonable expectation that a profit will be made from your activity.

SO ANYONE who is on ebay (or anywhere for that matter) selling 'stuff' for a profit SHOULD have an ABN and display said ABN where required.

If you are making a profit and not declaring it - then you will have problems 5-7 years down the track - many things are changing in the ATO especially with the introduction of the delayed but NEW ATO computer programming

[*CountessA*]

If your business has an annual turnover of $75,000 or more, you must register for GST and you'll need an ABN to do this. If your business has a lower annual turnover, it's up to you whether you register.

All non-profit organisations with an annual turnover of $150,000 or more must register for GST and therefore need an ABN. Also, businesses that need to be endorsed as a gift deductible recipient or an income tax exempt charity or both, require an ABN.

I needed an ABN to get a merchant account, irrespective of the turnover I expected. My bank also required me to display the ABN on my website before granting the merchant account and setting up the payment gateway for processing to the account.

Sellers on eBay who have a $75,000 turnover (not profit - TURNOVER) must have an ABN. If they have an ABN and don't display it, it can be interpreted that the details must be displayed... but legislation is still lagging behind technology and the information with Business.gov has still not been updated to specifically refer to websites.

If it's a company, then - yes, the ACN must be displayed on the website. That is unambiguously clear.

[golden]

http://www.abr.business.gov.au/(eyegso55201obq55tlpbm5ji)/content.aspx?page=FAQabn

http://wordconstructions.com.au/articles/business/abn.html

Just some quick links from google.  ^^

What are the specific questions you would like answered?

Please post them and give me 24/48 hrs and I will get a response from a business accountant and financial expert.

Ebay appears to be as muddled as farming.  ie should I be GST registered? I earn less than $75,000 but I can't claim depreciation on utes, tractors, sheds, buying/selling stock (should buyers have to pay GST on my stock if I'm not registered) etc.  At what point is it viable to be registered?  At cut out (finished shearing at that farmers property) should I allow him to take 15% of my $$ as tax?  Does he need to supply me with a group certificate? (in which case I would have 40 group certificates) They seem to be very similar Q's compared to Ebay.

Please put up some Q's and I'll get them answered. 

 

[Roo]

I needed an ABN to get a merchant account, irrespective of the turnover I expected. My bank also required me to display the ABN on my website before granting the merchant account and setting up the payment gateway for processing to the account.

So....could someone buy something....find out the seller's bank details...then dob them in to their Bank?

[*Brum6y*]

Another page deep from the bowels of the ATO:-
http://help.abr.gov.au/content.asp?sid=42&doc=/content/16985.htm&usertype=BC

Individuals (sole traders)
If you are an individual applying for an ABN, you should check your entitlement to register here.

You are entitled to an ABN if all of the following statements are true.

Your activity is carried out in the:
form of a business
nature of trade, or
form of a regular or continuous grant of a lease, licence or interest in property.
Your activity is carried out in Australia or you make supplies that are connected with Australia.
You have a reasonable expectation that a profit will be made from your activity.

SO ANYONE who is on ebay (or anywhere for that matter) selling 'stuff' for a profit SHOULD have an ABN and display said ABN where required.

If you are making a profit and not declaring it - then you will have problems 5-7 years down the track - many things are changing in the ATO especially with the introduction of the delayed but NEW ATO computer programming

The key word here is 'entitled' - is does not say an ABN is required.  This just stops anyone and everyone from jumping onto the bandwagon and willy-nilly getting an ABN for the heck of it - or to try and wrangle a 'deal' intended for business customers of other merchants (such as car dealerships).



In fact, when it comes to online only businesses, I do believe you do not even have to register a business name, let alone procure an ABN.

[da_ewok]

Enterprise
 A defined term in the goods and services tax (GST) and the Australian business number (ABN) legislation.

An enterprise includes a business. It also includes other commercial activities.

The other commercial activities include adventures and concerns in the nature of trade and where they are done on a regular or continuous basis, leases, licences and other grants of an interest in property.

It includes the activities of entities such as charities, deductible gift recipients, religious and government organisations, and certain non-profit organisations.

It also includes activities done in the form of a business or adventure or concern in the nature of trade.

It does not include:

private recreational pursuits and hobbies
activities carried on as an employee, labour hire worker, director or office holder
activities carried on by individuals (other than trustees of charitable funds) or partnerships (in which all or most of the partners are individuals without a reasonable expectation of profit.

[/b]

They key is PROFIT – remember the GST was bought in to stop/reduce the CASH economy….. and the crackdown in the last 2-3 years on ebay was about the CASH economy……. (But this is NOT just about ebay)
TFN – Tax File Number – identifies individuals to the ATO (who are employed)
ABN – Aust. Business Number – indentifies sole traders/partnerships to the ATO
ABN/ACN – Identifies businesses/corporations and trusts etc to the ATO

This conversation started originally with discussing businesses that ‘sell’ stuff and don’t display their ABN on their site AND hide their details behind a proxy…….

If you EXPECT to make a profit – then you are EXPECTED to have an ABN to allow the ATO to track/trace and determine if you are pursuing a cash based business and not declaring said income - PROFIT

[*Brum6y*]

If the business structure you have chosen is as a sole trader, a partnership or a trust, and not as a company, then you are required to register your business name in the state or territory in which you will operate. But you don’t need to register a business name if you plan to conduct your business under your, or your partner’s, first name and surname.

From Register your business name on the business.gov.au website.

This seems to limit the non-requirement for registering a business name when that business is being conducted under one of the partner's personal name.


Then there's this: http://www.fairtrading.nsw.gov.au/Businesses/Business_names.html#Trading_on_the_internet

Trading on the internet
If your business trades only via the internet you do not have to register and display a business name in New South Wales.

As for the requirement to have an ABN - the only reference I have found is this:

If your business has a GST turnover of $75,000 or more (or $150,000 or more for not-for-profit entities) you must register for GST and you'll need an ABN to do this. If your business has a lower GST turnover, it's up to you whether you register.

Otherwise, there is this on the ATO website:

ABN a great start for business
                      
An easier and smarter way of doing business
Getting down to business has never been easier thanks to the Australian business number (ABN). It's your key to a quicker and smarter way of dealing with other businesses and government.

Great reasons to have an ABN

The ABN is a unique 11 digit identifier which:

 * helps you claim goods and services tax (GST) credits
 * lets you claim fuel tax credits you qualify for
 * if not quoted to businesses you deal with, may result in amounts being withheld from payments to you under pay as you go (PAYG) withholding
 * allows businesses to easily confirm your details for ordering and invoicing.

It doesn't say you have to have an ABN.

Mind you, you can't do a lot of other things without an ABN. Registering a .com.au domain name, for one.




But, getting back to the original point - certainly, Companies are required to display their ACN/ABN - but are (non-company) ABN holders required to display it?

I don't have the answer - but if a trader goes out of their way to conceal it and hide behind proxy servers, etc. - then I would be rather wary!!

[da_ewok]

ABN - NSW - different states, different rules!

A business name V Sole trading V partnerships.

If you are doing business IN Australia, and expect to make a profit - it is advisable to have an ABN.......... and if you want to be trusted, even more so

again..............  "written advertisements making a specific offer which is capable of being accepted (such as by the completion of an order form)." then an ABN is required

I think when push comes to shove the ATO will interupt those written laws, that THEY wrote in any fashion that they choose to, that suits them best

[*Brum6y*]

Wokkie, I agree with your basic concerns 100%, but I must point out that the citation of the phrase "written advertisements making a specific offer which is capable of being accepted (such as by the completion of an order form)." made above falls under the heading of a Company.  It is part of the requirements of a Company and, if I read it correctly, refers to the ACN, not the ABN (even though the numbers are almost the same).

As cited above, that requirement has absolutely no bearing on any other form of business.  There may be something somewhere else that relates to non-Company businesses, but I haven't come across anything.

[da_ewok]

If your company has an Australian Business Number (ABN), you may use the ABN with your company's name in place of the ACN on company documents and negotiable instruments,

[*CountessA*]

I think there's largely agreement that these requirements have to be updated to reflect the overwhelming shift towards online businesses.

I hope that Australian businesses operating online will be required to display their ABN rather than be informed they CAN do so or SHOULD do so.

I agree that when a business doesn't display its ABN on its website, the impression one gets is that of shiftiness and shonkiness.

I also have a feeling of greater security when purchasing from an eBay seller who displays an ABN than from purchasing from an eBay seller who doesn't. (That's for Australian sellers, of course.)

[*Brum6y*]

If your company has an Australian Business Number (ABN), you may use the ABN with your company's name in place of the ACN on company documents and negotiable instruments,

OK.  Sorry on that one.

I stand corrected.