Home – New Forums Starting your journey Sole Trader to Company (Length?)

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  • #989182
    GSanders12
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    Hi guys. I have to change my entity structure from sole trader to a company since I am adding on 2 new directors.

    We are launching our marketing campaign within 2 weeks for perfect timing.

    It says on the site that I have to get a NEW ABN all together.. if I want to make the switch to a company. Does anyone know the length of this process and if I can get it done before 2 weeks?

    Thanks!

    #1170796
    James Millar
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    GSanders12, post: 198226 wrote:
    Hi guys. I have to change my entity structure from sole trader to a company since I am adding on 2 new directors.

    We are launching our marketing campaign within 2 weeks for perfect timing.

    It says on the site that I have to get a NEW ABN all together.. if I want to make the switch to a company. Does anyone know the length of this process and if I can get it done before 2 weeks?

    Thanks!

    The company can generally be incorporated within 24 hours. The ABN & TFN application can be lodged online once incorporated. The quoted service time for ABN’s is up to 28 days but it can be anywhere from immediate to 2 weeks in practice.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1170797
    GSanders12
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    JamesMillar, post: 198263 wrote:
    The company can generally be incorporated within 24 hours. The ABN & TFN application can be lodged online once incorporated. The quoted service time for ABN’s is up to 28 days but it can be anywhere from immediate to 2 weeks in practice.

    I spoke to them today and they said it can take immediate effect to 20 business days.

    Let me know what you think of my plan:

    I will apply for the new ABN and then register for a company and company structure with ASIC.

    If my new ABN doesn’t process within 2 weeks (which is the time of my marketing campaign launch), I will use my current sole trader entity as a back up plan to launch with my marketing campaign.

    Hopefully my new ABN comes through immediately.

    So it takes 20 business days for a new ABN but the company name registration takes only 24 hours usually?

    What does TFN have to do with it though? Is that related to the ABN?

    Thank you!

    #1170798
    Greg_M
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    GSanders12, post: 198281 wrote:
    Let me know what you think of my plan:

    I will apply for the new ABN and then register for a company and company structure with ASIC.

    I think your plan has a hole in it.

    The ABN will belong to the company, not you … you’ll have to have a company set up to apply.

    An individual (entity) can only hold one ABN … the company will be a legal entity in it’s own right, regardless of the individuals associated with it.

    Edit: ditto for the TFN

    #1170799
    GSanders12
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    estim8, post: 198290 wrote:
    I think your plan has a hole in it.

    The ABN will belong to the company, not you … you’ll have to have a company set up to apply.

    An individual (entity) can only hold one ABN … the company will be a legal entity in it’s own right, regardless of the individuals associated with it.

    Edit: ditto for the TFN

    Thanks for the reply estim8!

    Wait, can a company hold more then one ABN?

    Can you provide me with any suggestions to fix the plan to achieve the goal?

    Should I get a new company registered first as a PTY LTD entity & then proceed to getting a new ABN?

    Thank you!

    #1170800
    Greg_M
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    One ABN/TFN per entity … individual, company, or partnership.

    Simple really, an ABN can’t exist for a company if it doesn’t exist.

    ATO can’t process anything till one’s registered as far as I’m aware.

    #1170801
    GSanders12
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    estim8, post: 198318 wrote:
    One ABN/TFN per entity … individual, company, or partnership.

    Simple really, an ABN can’t exist for a company if it doesn’t exist.

    ATO can’t process anything till one’s registered as far as I’m aware.

    Oh okay! So that means I can use my CURRENT ABN to create another company registered as a PTY LTD?

    That means I will have 2 companies under my current ABN which are:

    1) Sole Trader

    2) PTY LTD

    With that being said, can I use my Sole Trader as a back up for my soon-to-be marketing campaign launch if my PTY LTD company takes too long to process/register? Or will it process fairly fast?

    Thanks again estim8.

    #1170802
    Prashant Murphy
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    GSanders12, post: 198320 wrote:
    Oh okay! So that means I can use my CURRENT ABN to create another company registered as a PTY LTD?

    That means I will have 2 companies under my current ABN which are:

    1) Sole Trader

    2) PTY LTD

    With that being said, can I use my Sole Trader as a back up for my soon-to-be marketing campaign launch if my PTY LTD company takes too long to process/register? Or will it process fairly fast?

    Thanks again estim8.
    No, it doesn’t work like that.

    When you register a Pty Ltd company, it gets an ACN (Australian Company Number). Getting an ABN is not technically required and I would think you can launch your marketing campaign with just an ACN. Your company’s ABN will just be the ACN with 2 numbers added at the start.

    It is completely separate from your ABN which you use as a sole trader.

    Regardless, I think if you apply for an ABN for the company straight away after registering, you will very likely be fine.

    Hope this makes sense!

    #1170803
    James Millar
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    Hey GSanders the comments above from Estim8 are right.

    I’m assuming from all of your confusion that you don’t have an accountant or have not consulted an accountant about this. I cannot emphasise enough that you should really speak with one before doing anything. There are all sorts of tax issues associated with a transfer of business and there are reporting obligations associated with having a company – these are considerably more involved and more expensive than operating as a sole proprietor.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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