Home – New Forums Starting your journey Confused about Sole Trader for Online Business

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  • #977763
    TLJM
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    Hi all

    I stumbled across this forum and I find the discussions are really interesting and useful. I hope someone can share their experience and advice some of my following concerns, which I have yet find the answers.

    I am planning to setup a online business selling women accessories.
    Starting up as a Sole Trader seemed to be the best option for a start. However, from my understanding if I register as a Sole Trader, I have
    to register with the relevant authority in every Australian state in which I plan to do business. The main purpose of setting up an internet business is to capture a wide audience of customers regardless of location, but to register in all states will cost too much.
    So if I choose to register the business in NSW, am I legally not supposed to sell to someone who is based in VIC? In my website, do I have to mention clearly that sales in done in NSW only? Since it’s a internet business, it’d be hard to control where the buyers are from and I may not even know their exact location.

    And lastly, by registering as a Sole Trader, does that mean also that I’d not be able to sell internationally?

    I hope someone can enlighten me if my understanding about Sole Trader is correct.

    Thanks!

    #1101128
    JacquiPryor
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    • Total posts: 2,344
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    Hi there – I hope this helps :)

    I have to register with the relevant authority in every Australian state in which I plan to do business.

    When do you plan to start trading? From May 28 Australia will have a national business name registration system so you wouldn’t have to register in every state that you trade in. Once application will give you a national business name. You can read more about the national system here

    If you intend to start trading earlier than May 28 then just register in the State that you are based in (i.e. NSW) – and, they will automatically move you onto the national system in due course. You can still sell to people in other states/countries.

    All the best with it!

    NB: All of the above is only applicable if you are planning to use a business name. If you are going to operate under your own personal name – then you don’t have to register a business name in any state.

    A sole trader is just one type of business structure – it just means that it is you alone operating the business or responsible for the business. You can still operate your internet business in just one state but sell to other states/countries; if you were to set up physical trade or offices in other states you would need to register in those states too – but, as mentioned from May 28 it will all be national anyway.

    If you register a business name, note that you will still be the legal entity accountable and responsible for the business. A business name is not an entity – so it would be you trading as XXXX name. Further a business name doesn’t “protect” the name. Before registering the business name (and, yes I am bias in this opinion) I think it’s a good idea to make sure your chosen name isn’t breaching any trademark rights.

    #1101213
    JacquiPryor
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    • Total posts: 2,344
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    Hi there – I hope this helps :)

    I have to register with the relevant authority in every Australian state in which I plan to do business.

    When do you plan to start trading? From May 28 Australia will have a national business name registration system so you wouldn’t have to register in every state that you trade in. Once application will give you a national business name. You can read more about the national system here

    If you intend to start trading earlier than May 28 then just register in the State that you are based in (i.e. NSW) – and, they will automatically move you onto the national system in due course. You can still sell to people in other states/countries.

    All the best with it!

    NB: All of the above is only applicable if you are planning to use a business name. If you are going to operate under your own personal name – then you don’t have to register a business name in any state.

    A sole trader is just one type of business structure – it just means that it is you alone operating the business or responsible for the business. You can still operate your internet business in just one state but sell to other states/countries; if you were to set up physical trade or offices in other states you would need to register in those states too – but, as mentioned from May 28 it will all be national anyway.

    If you register a business name, note that you will still be the legal entity accountable and responsible for the business. A business name is not an entity – so it would be you trading as XXXX name. Further a business name doesn’t “protect” the name. Before registering the business name (and, yes I am bias in this opinion) I think it’s a good idea to make sure your chosen name isn’t breaching any trademark rights.

    #1101130
    Kennethti
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    • Total posts: 415
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    Hello there,

    It’s probably best that you swing your ideas past a lawyer or an accountant – but your first point of call is to obtain an ABN for the entity you with to trade under. The ATO has a splendid guide to entities on its website.

    Once you’ve got an ABN, if you intend on trading in a different name from what your ABN is registered under, then you will need to register a business name. In the past it used to be true that you would have to register a business name in all jurisdictions that you intended to trade under, however as Jacqui has said from May 28 onwards all of that will be migrated into a National Business Names System administered by ASIC.

    The type of entity does not stop you from trading internationally however you may have other obligations if you engage in international trade. The business.gov.au website has some general guidelines in relation to exporting goods from Australia.

    Hope this helps.

    #1101215
    Kennethti
    Member
    • Total posts: 415
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    Hello there,

    It’s probably best that you swing your ideas past a lawyer or an accountant – but your first point of call is to obtain an ABN for the entity you with to trade under. The ATO has a splendid guide to entities on its website.

    Once you’ve got an ABN, if you intend on trading in a different name from what your ABN is registered under, then you will need to register a business name. In the past it used to be true that you would have to register a business name in all jurisdictions that you intended to trade under, however as Jacqui has said from May 28 onwards all of that will be migrated into a National Business Names System administered by ASIC.

    The type of entity does not stop you from trading internationally however you may have other obligations if you engage in international trade. The business.gov.au website has some general guidelines in relation to exporting goods from Australia.

    Hope this helps.

    #1101132
    TLJM
    Member
    • Total posts: 3
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    Hi Kenneth and Jacqui,

    Thanks so much for your quick responses and valuable information I feel so much relieve now knowing that I do not have to spend so much on registration.
    I will check out more on the national business name registrations.

    Thanks again!

    #1101217
    TLJM
    Member
    • Total posts: 3
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    Hi Kenneth and Jacqui,

    Thanks so much for your quick responses and valuable information I feel so much relieve now knowing that I do not have to spend so much on registration.
    I will check out more on the national business name registrations.

    Thanks again!

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