There could soon be a single Business Identifier for Companies. That is, if the Treasury Legislation Amendment (Spring Repeal Day) Bill 2015 is passed. The Bill proposes amendments relating to Superannuation, Corporations and Taxation as part of the Government’s commitment to deregulation.
In the 2015-16 Budget, the Australian Government announced measures to make it easier to register a new business as part of the Growing Jobs and Small Business package which is meant to encourage Business Start-ups and Entrepreneurship. As part of the package, the Government is planning to reduce the number of business identifiers to just one.
The plan is to introduce a more streamlined Business Registration process, where individuals who are seeking to register a business will be able to log onto www.business.gov.au and enter their contact details just once. You will then be issued with a secure login and an Australian Business Account to make it easy for you to interact online with a range of Government Agencies. For example, you can find whether there are any Commonwealth or State licences, or permits you might need, to get your new business up and running.
From July 2016 the process for applying for Registration as a Company under the Corporations Act 2001 and applying to be registered in the Australian Business Register under the A New Tax System (Australian Business Number) Act 1999 (“ABN Act”) will be linked. This will take care of all the company registration requirements in one single transaction.
New companies will be issued with a single numerical identifier, an Australian Business Number (“ABN”), as part of their company registration process. A company will be registered for ABN purposes at the same time it is registered as a company under the Corporations Act. You will no longer need an Australian Company Number (“ACN”) or a Business Tax File Number, you can use your Australian Business Number (“ABN”) to interact with the Australian Taxation Office (“ATO”) and the Australian Securities and Investments Commission (“ASIC”).
ASIC will no longer give an ACN to a company on registration from 1 July 2016. Accordingly, new companies will no longer be able to use the ACN as their name. However, a company registered on or after 1 July 2016 will be able to use the ABN in its name. An existing company will retain all its current numerical identifiers. A company registered before 1 July 2016 will be able to continue to use its ACN under the Corporations Act and will not be required to apply for an ABN if it does not have one.
The Treasury has invited comments on the proposed amendments. The closing date for submissions is Monday 28 September 2015.
There are also other initiatives to encourage start up companies, in that they will be allowed to immediately deduct professional expenses incurred when they start a business, such as legal expenses on establishing a company, trust or partnership, rather than writing them off over five years. This will provide immediate cash flow benefits for small business.
Another initiative pertains to Employee Share Schemes. Employees can share in, and benefit from, the future growth and success of the business through an employee share scheme where the employer offers shares or options in their company reducing salaries and allowing the Employer to invest more of the company’s cash in growing the business. Usually Shares and options issued under an employee share scheme form part of an employee’s remuneration and so are subject to income tax. From 1 July 2015, the law provides that employees will not generally have to pay income tax until they can realise a benefit from their options. Finally, the Australian Government also plans to make changes to enable easier access to innovative sources of funding such as Crowd Sourcing.
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