Home – New Forums Starting your journey ABN for Trust or company

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  • #982874
    Jimmy12
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    Hi there,
    Can some one help with following questions.
    My accountant formed a business structure and registered a company for me.
    The structure is like an ABC trust where the trustee is ABC pty ltd and
    myself and my wife are benefecries for the trust.

    He gave me ACN number, ABN Number and GST Number.

    when I checked the ACN its shows correctly as ABC Pty ltd.
    When I checked the ABN its shows as “trustee for ABC Trust” and entity is Discretionary Trading Trust
    same thing is showing in the GST certificate too.

    After a lot of googling I understand that the ABN is for the trust and not for the company. Am i right ?

    Do I need an ABN for the company to start trading in company name?

    When I create a business card or website is it mandatory to mentiond as ABC PTY Ltd or just ABC is enough, because i didnt find any business name register for me under the trust ABN.

    I have a client ready for work and they are asking for

    Company name
    ACN#
    ABN#
    GST Registered yes/No

    I have all these details but the ABN and GST # are for the trust, does that really matters?
    or is this the way it suppose to be?

    The idea for forming this structure is to split the income between myself and wife as my wife is not working.
    As I start googled more the more I’m confused. I hope some one can answer my questions.

    #1139311
    Greg_M
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    I have the same structure in place, and ditto, the trust holds the ABN.

    I think this is typical (not an accountant or expert).

    I’m not registered for GST, so I can’t help with that one, but I just use the trust ABN if it’s requested, and haven’t had an issue.

    The trust is where the money goes eventually (if there is any :)), so I guess it makes sense.

    I just use the company as the trading entity and let the accountant sort it out.

    #1139312
    JacquiPryor
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    Hopefully this will soon be confirmed…

    But, to clarify – I think that the ABN belongs to the trustee for the trust… which, it seems in your case is likely the Company.. So, it would make sense to use that ABN – same with your GST registration.

    As to using the name on cards/website etc… if you have the company only registered then you need to show it as “ABC Pty Ltd” and not just ABC. For this, you would need to have the business name also registered. You can double check this via the database at http://www.asic.gov.au. Searching on the ABN database will not necessarily find whether the business name is registered or not. If it has been registered for you then it may be owned by the company (Pty Ltd), so, wouldn’t necessarily shown up on the ABN record.

    Hope this helps.

    #1139313
    Greg_M
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    Now I’m intrigued.

    In my case the company, is the trustee of the discretionary trust, but it’s the trust that has an ABN. I discovered this by reverse searching using the ABN no. and the trust not the company surfaced. The company comes up under it’s ACN no.

    #1139314
    PRO
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    The ABN is correctly labelled as “The Trustee for the ABC Trust”. A Trust is more like a relationship than a legal entity. It can not sue or be sued, it is the trustee that is sued and can sue in its role as trustee. Put simply, but not technically legally correct, the trustee is able to be indemnified out of the assets of the trust but its liability is not limited to the assets of the trust. The trustee actually holds the assets for the benefit of the beneficiaries in the trust.

    That’s one of the reasons that you use a $2 company as the trustee.

    You can change trustee at any time.

    You are not required to disclose that the trustee is operating as a trustee of the trust and this was harder to find out pre-ABN days, but now the ABN gives it away.

    The ABN and the TFN are for the trust. The Company must have an ACN but should never do anything in its own right so there is no need for an ABN or TFN for it.

    #1139315
    CindyK
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    Hi Jimmy,

    I think it has all been covered, but just to put it all in one, for your supplier you say:

    Your business is
    Name: ABC Pty Ltd (because it is the business). You put it on your invoices, business cards etc.
    ACN: Company number attached to the business. It is a requirement to put this on all official documentation such as letterhead, cards, invoices etc.
    ABN: Use the one attached to the trust. This is fine. When you lodge your BAS you will be calculating all the data related to ABC Pty Ltd and lodging it with the ABN attached to the Trust. That is fine.
    GST Status: The GST status of the trust applies to the business attached – in your case the ABC Pty Ltd.

    It’s all quite standard, don’t be worried about it. Make sure you find an accountant that you are able to clarify these things – makes life alot easier.

    #1139316
    Jimmy12
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    Thanks Cindy, PRO and everyone to answer my question. I’m pretty clear now and out of worry :)

    #1139317
    Shelcom
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    Hi Jimmy,

    Just really quickly, as the previous posts answer your questions very well, in the case that you don’t want to include the Pty. Ltd. on your business cards, etc., you can always register your business name.
    This way you can be ABC Ptyl. Ltd. trading as ABC.

    The process in your case, as you are trading under the trust will be two pronged, but may be worth it, if you would like to trade as ABC rather than ABC Pty Ltd as Trustee for the ABC Family Trust.

    You will need to apply for an ABN for ABC Pty Ltd (yes, even though it is not trading directly).
    Once ABC Pty Ltd has an ABN you can apply for the business name ABC.
    When business name ABC is finally registered, you will then transfer the business name under your ABC Family Trust ABN.

    The reason you would have to do a registration and then a transfer is because you cannot register any name with ASIC, be it a company or a business, if that name is already registered, unless you own the name.

    So only you (ABC Pty Ltd) can register business name ABC. Once it’s registered you can then transfer it to anyone you like, which in this case will be your trading entity ABC Family Trust.

    I hope this isn’t too confusing. Feel free to ask any questions if it is!

    Good luck!
    Gosia

    #1139318
    Amaturehour
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    I’m not sure if anyone is still following this thread however…

    I am also looking for similar information to above, however I also need to obtain a building work contractors licence to operate the new venture i’m thinking of starting up soon, and not sure if i can trade under the family trust ABN when the company would need to have the contractors licence?

    #1139319
    Precise Tax Solutions
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    Why does the company need to have the contractors licence?

    Why can’t the trust hold that licence (well the trustee company on behalf of the trust)?

    Cheers

    #1139320
    Amaturehour
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    Hey cheers for your reply,

    So that is what I mean, if the company is a corporate trustee, and that company has the contractors licence is there any dramas with registering the business name against the trust and noting the corporate trustee as the organisational representative?

    So on my invoices will be the new registered business name and trust ABN, however covered by the company’s (corporate trustee) contractors licence, but if anyone wants to check up on the licence it won’t have any reference to the trading business name??

    Ultimately I want to legally (being licence and tax reasons) operate a small building company through the trust.

    #1139322
    Ross Forrester
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    This is a messy issue for some government agencies. In particular some agencies have software programs that will only accept a company ABN when you register.

    I recommend that you contact a person by telephone and go through the issue.

    If their is no explicit rule prohibiting the entity operating as a trust then you are most likely OK to do it. However practically you will need a company ABN to obtain the license and show the company ABN acting as trustee for the trust ABN.

    Make sure you have evidence that you notified your government agency that you are acting as trustee.

    If you quote an ABN you do not need to quote the ACN.

    In that case a person who looks up your details will find the trust; the trust will be the correct entity doing the work and generating income, and the company will hold the legal license that it then uses in the case of the company acting as trustee of the trust.

    Do not register the company for GST or a TFN. Just give it an ABN or you will have to do a plethora of additional forms.

    #1139323
    Amaturehour
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    Ross Forrester, post: 253353, member: 101125 wrote:
    This is a messy issue for some government agencies. In particular some agencies have software programs that will only accept a company ABN when you register.

    I recommend that you contact a person by telephone and go through the issue.

    If their is no explicit rule prohibiting the entity operating as a trust then you are most likely OK to do it. However practically you will need a company ABN to obtain the license and show the company ABN acting as trustee for the trust ABN.

    Make sure you have evidence that you notified your government agency that you are acting as trustee.

    If you quote an ABN you do not need to quote the ACN.

    In that case a person who looks up your details will find the trust; the trust will be the correct entity doing the work and generating income, and the company will hold the legal license that it then uses in the case of the company acting as trustee of the trust.

    Do not register the company for GST or a TFN. Just give it an ABN or you will have to do a plethora of additional forms.

    Thanks Ross, all makes sense glad I’m pretty much on the right path!

    I have called my accountant, ASIC & Consumer of business affairs (spending plenty of time on hold with the last two!) and they kind of all give generic advice and refer me to the other…. how i can get it in black and white what I’m doing??

    The tax issue seems to be fairly straight forward in that structure, I just want to be 100% about running a biz through the trust with corporate trustee being the licensed party. It is responsible for the trust and I’m the director so it all makes sense, problem is I probably won’t know if it’s not unless the worst occurs.

    #1139324
    Ross Forrester
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    Ask the accountant or lawyer to give you a quote to put it in black and white.

    Advice is not advice until it is documented (an email is documentation). If your advisor is charging you fees but not prepared to document what they are saying you are basically paying for advice and not getting it.

    #1139325
    Amaturehour
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    Good point! I still have to get a lawyer to change the trustee’s around so I’ll get it covered in that process.

    Thanks again for all the advice!

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