Running a business isn’t just for people who are driven to be a Forbes recognised CEO. In fact, for a business to be relevant, it doesn’t need to make a gigantic fortune or overpower all its competitors. 

Small businesses validate this claim.  

Small businesses are an integral part of the Australian economy. As of 2024, nearly 98% of Australian businesses are considered to be small businesses. Not only do they generate billions in value to the Australian GDP, small businesses also employ millions of people throughout Australia. 

However, just because small businesses are technically ‘small’, it doesn’t mean they don’t have to adhere to rules and regulations – such as proper registration. 

Whether your small business is steadily growing to new heights or it’s simply a side hustle you’re mostly doing for fun, every small business in Australia needs to be registered. 

Keep reading to discover what you need to know about registering your small business. 

What Is A Small Business? 

A question we often get asked is, “does my business qualify as a small business?” 

It can be a bit tricky to know what defines a small business. Different sectors have their own definition of a small business, each for their own reasons. For instance, the Australian taxation office and Fair Work Australia don’t define a small business the same way. 

So, if you’re ever wondering if you should classify your business as small, it’s important to take a look at the context first. The Australian Bureau of statistics defines a small business as a workplace with less than 20 employees. For the purposes of this article, we’ll stick with that definition. 

You can read more about what defines a small business in our article: What is the Definition of a Small Business in Australia

Do Small Businesses Need To Be Registered? 

Yes, every business in Australia needs to be registered, preferably before you start any kind of business operations (although it’s never too late). 

The registration for your small business will depend on the legal structure of your business. The most common types of business structures in Australia are: sole trader, partnership and a company. 

To register as a sole trader or in a partnership business, you simply need to apply for an Australian Business Number (ABN). An ABN is an 11 digit identification number that is unique to your business. Every partner in a partnership business structure will need their own ABN (ABNs cannot be shared). 

Once you have your ABN, you are free to start operating your business. If you’re using a name other than your own, then you will need to Register A Business Name, so be sure to get that done as quickly as possible. After that, you won’t have any more legal obligation in terms of your business registration. 

However, it is at this point that many business owners opt to get legal protections for their newly registered business, such as a Partnership Agreement, so they can better secure their business’s future. You can chat with our legal experts about the kind of legal mechanisms available to protect your small business.  

A company also needs to be registered. However, the registration process for a company is very different from that of a sole trader or partnership business. While a company will still need to get an ABN, there’s a number of additional steps – we’ll talk about registering a company in more detail later, so keep reading. 

How Much Does It Cost To Register My Small Business?

Getting an ABN is completely free. Plus, it can also be done online. You just need to go to the Australian Business Register website, click on the application form and follow a fairly simple application process. 

The entire application shouldn’t consume too much of your time. To make this process easier, ensure you’re prepared with the right details about yourself and your business. Once you’ve clicked submit, if the application has been successfully processed, then you will receive your ABN in an email. 

While getting an ABN is free, registering a company comes with fees. The exact amount of fees will depend on the kind of company you’re registering, so it’s best to check with the Australian Securities and Investments Commission (ASIC). We’ve written more about the cost of registering a company here, check it out if you’d like to learn more. 

Do I Need To Register My Business With ASIC?

As we mentioned above, only companies need to register with ASIC. So, if you’re thinking of starting a company then yes, you will need to register it with ASIC as all companies in Australia are registered with them. 

Registering a company is a little more complex and time consuming, compared to other business structures. To start a company, you need to figure out things like directors, shareholders and company governance. Moreover, running a company requires a lot more upkeep as you’ll need to pay annual fees and adhere to a number of other obligations. 

It’s a good idea to get in touch with a legal expert when you’re ready to register your company with ASIC. They can talk you through the application process, your legal obligations when running a company and discuss the right kind of company structure for your venture i.e a Dual Company Structure or a B-Corp

Is It A Good Idea To Register My Small Business As A Company? 

For all serious business ventures, we always recommend registering as a company. Even though it takes a little longer and is more expensive, a company provides much greater legal protection than a sole trader or partnership business structure.  

This is because a company is a legal entity on its own. Due to its legal status, companies are able to operate separately from you. They can do things like own or sell property, earn a profit, incur debt as well as be involved in court matters. As such, your personal liability is limited which can help protect you if something happens to go wrong. 

If you plan on expanding your business in the future, then it’s a good idea to have a company business structure set up right from the start. Due to the legal protection they offer, companies are a wise choice for any business that’s looking to grow later on. 

Essentially, it’s always a good idea to register as a company. A company structure is the better option for managing the risks that come with running any kind of business venture, so it’s always worth the investment. 

Next Steps 

Registering your small business in Australia is essential. The registration process will depend on the kind of structure your business will have – it’s important to do your research, consult with a legal expert and take the necessary next steps from there. To summarise what we’ve discussed: 

  • Small businesses are vital to the Australian economy, comprising nearly 98% of businesses in 2024 and contributing significantly to GDP and employment 
  • Every small business in Australia, regardless of size or nature, must be registered, with the registration process dependent on the business’s legal structure
  • The definition of a small business varies by context. The Australian Bureau of Statistics defines a small business as a workplace with less than 20 employees
  • For sole traders and partnerships, registration involves obtaining an Australian Business Number (ABN) and, if using a business name, registering it
  • Registering a company is a more complex process with additional steps and potential fees, involving considerations like directors, shareholders, and governance
  • Obtaining an ABN is free, while registering a company incurs fees, and the exact amount depends on the type of company being registered
  • It is recommended to register as a company for serious business ventures due to the greater legal protection offered, limiting personal liability and facilitating future growth 

If you would like a consultation on registering your small business, you can reach us at 1800 730 617 or for a free, no-obligations chat.

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