Both are 11-digit Australian Business Numbers, issued by the same body, the Australian Business Register. The difference is not in the number itself but in what kind of legal entity sits behind it, and that difference changes your tax treatment, your liability, and what happens if you ever change structure.
What actually differs
Who the ABN identifies
A sole trader ABN identifies you personally. You and the business are legally the same entity.
A company ABN identifies the company itself, a separate legal entity from you, even if you are the sole director and shareholder [Sprintlaw, sprintlaw.com.au].
How income is taxed
Income earned under a sole trader ABN is your personal income, taxed at individual marginal rates, with access to the tax-free threshold.
Income earned under a company ABN is taxed at the company tax rate, currently 25% for most small and medium businesses (base rate entities) or 30% for larger companies, with no tax-free threshold [ATO, ato.gov.au].
Liability
Debts and legal claims against a sole trader ABN are debts against you personally, with no separation between business and personal assets.
Debts against a company ABN belong to the company, with limited liability protecting your personal assets in most circumstances, subject to director duties and any personal guarantees you have signed.
What it takes to get one
A sole trader ABN can be applied for directly through the Australian Business Register, free, often issued instantly if your details match ATO records.
A company ABN can only be applied for after the company is registered with ASIC and has received its Australian Company Number, since the ABN application for a company requires that ACN [Sleek, sleek.com].
This means a company ABN always comes after a separate $611 ASIC registration step, while a sole trader ABN has no equivalent prerequisite.
How many you can hold
You can only ever hold one sole trader ABN at a time, regardless of how many different ventures you run under it [Sprintlaw, sprintlaw.com.au].
A company, being its own entity, gets its own single ABN, separate from any personal ABN you might also hold as an individual.
If you operate as both a sole trader and a director of a separate company, you will have two ABNs, one for each entity.
Why this matters when deciding which structure to use
The ABN itself is just an identifier, so the real decision is which structure suits your situation, covered in detail in our guide on choosing between a sole trader and a company.
The ABN differences described here are a downstream consequence of that structural choice, not a separate decision to make on their own.
What stays the same regardless of which ABN you hold
Both types of ABN require updates to the Australian Business Register within 28 days of any change to your details, including your address.
Both need a valid Australian address associated with the registration, and a PO Box does not satisfy this requirement for the core registered address, though a separate postal address can be a PO Box.
Space Penguin offers virtual addresses in Sydney and Melbourne from $20 per month plus GST, suitable for either a sole trader ABN or a company ABN. Visit spacepenguin.io/virtual-address for current details.
FAQs
Can I switch my sole trader ABN to a company ABN?
Not directly. You cannot convert one ABN into the other, since they belong to different legal entities. You register a new company, get its ACN, apply for a new ABN for the company, and then cancel your old sole trader ABN once you have transitioned across.
Does a company ABN cost more to obtain than a sole trader ABN?
The ABN application itself is free either way. The real cost difference is the prerequisite step: a company needs to be registered with ASIC first, currently $611, before its ABN application can proceed.
Can I have a sole trader ABN and a company ABN at the same time?
Yes, if you operate as a sole trader for one activity and separately as a director of a company for another. These are two different legal entities, each with its own ABN.
Which one is taxed more favourably?
It depends on your income level. At lower income levels, the sole trader ABN's access to the tax-free threshold and lower marginal rates often works out better. At higher, sustained profit levels, particularly if profit is retained in the business, the company tax rate can become more favourable.
Does my registered address need to be different for each ABN type?
Not necessarily, but a sole trader's address requirement is more flexible than a company's. A company's registered office must meet the stricter Corporations Act requirements, including written occupier consent if it is not company-owned premises.