ATO Community

ABN for sole trader

Newbie

Views 175

Replies 1

Good day Team!

I am a full time IT worker who always wanted to have a business. Let me give you my scenario and than ask questions so its easy to understand.

 

My scenario: I am going to be a sole trader and will be trying many things form udemy to youtube to consulting. I will not employ anyone but will take help from freelancers time to time and will employ if my business takes off. At this point of time it is just an experiement or hobby.

Question: Should I register my business as sole trader or small business?

Question: Will my own ABN be used or should I register a new one under business name?

 

Thanks.

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @forysingh,

 

There is a difference between a sole trader and a company they both have different legal, tax and reporting obligations. If you are going to operate as a sole trader you will use your ABN. You would only apply for a new ABN if you were changing the Business structure.

for example from a sole trader to a company.

 

To determine whether your activities classify as a business or hobby, we recommend you look at the 'Are you in business' page.

 

Keep in mind your intention plays a big part in it - if you intend to make a profit, generally you are running a business.

 

It's also worthwhile to look at this information on key differences of a hobby for a comparison. You'll find a 'Business or Hobby tool' towards the end of the page to use as a guide based on your specific circumstances.

 

If you conclude that your activities currently fall under a hobby, it's best you review this regularly to keep a check that your activities still fit within that classification.

 

I hope this helps.

 

Simone

 

 

 

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @forysingh,

 

There is a difference between a sole trader and a company they both have different legal, tax and reporting obligations. If you are going to operate as a sole trader you will use your ABN. You would only apply for a new ABN if you were changing the Business structure.

for example from a sole trader to a company.

 

To determine whether your activities classify as a business or hobby, we recommend you look at the 'Are you in business' page.

 

Keep in mind your intention plays a big part in it - if you intend to make a profit, generally you are running a business.

 

It's also worthwhile to look at this information on key differences of a hobby for a comparison. You'll find a 'Business or Hobby tool' towards the end of the page to use as a guide based on your specific circumstances.

 

If you conclude that your activities currently fall under a hobby, it's best you review this regularly to keep a check that your activities still fit within that classification.

 

I hope this helps.

 

Simone