Glossary of Business Terms

What is a domain name? What’s the difference between an ABN and an ACN? How does a sole trader differ from a company?

There’s a lot of legal jargon and names to understand when setting up a business, so here’s our quick guide to business terms you might hear and what they mean.

Australian Business Number (ABN)

An ABN or Australian Business Number is a unique identifier assigned to all businesses in Australia, issued by the ATO. You’ll need an ABN to complete an Australian tax return or open a business bank account, and you should add it to your invoices and paperwork. It can also be used when applying for an Australian business licence. Once registered, you’ll have a unique 11-digit business number valid for life. Namecorp can help you set up an ABN with one easy application.

Australian Company Number (ACN)

An ACN stands for Australian Company Number and is a 9-digit unique identifier assigned to all companies by (ASIC) Australian Securities and Investments Commission.

It is important to note that not all businesses are companies. A company is a particular business structure that is legally separate from its owners – see the definition below.

Find out more about ACNs and ABNs.

Sole Trader

A sole trader means you’re an individual and the sole business owner, but you can employ staff. You’re responsible for all decisions and losses in your business, and you report the business income in your tax return.

Partnership

You and your partners run a business together and share income, losses, and business control. The partnership can employ staff, but the partners in the partnership are not considered employees.

Company

A company is a separate legal entity from you and has at least one shareholder (owner) and one director (who runs the business). Income and losses belong to the company. Companies can employ staff.

Trust

A trustee manages your business or business-like activity to benefit others (the beneficiaries). A trustee is responsible for dealing with the trust, including lodging returns and distributing income or losses to the beneficiaries, and is also responsible for overseeing the payment of debts.

Superannuation

Superannuation is like a pension. Businesses are required to pay superannuation for their employees.

GST

Goods and services tax (GST) is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. If your business makes over $75,000 per year, you need to register for GST, and you will need to factor it into your invoices and pay the GST when you complete your tax return. Namecorp can help you with this as part of your ABN application.

Trademark 

A trademark is a way of identifying a unique service or product, or brand identity. A trademarked business name will give you the exclusive rights to use the name for ten years, at which point you’ll need to renew it. You can also trademark colours, logos, products, or anything with distinctive features.

Business Name

A business name is a name you wish to trade your business under. If you want to use any name other than your name, you will legally need to register a business name.

Domain Name

A domain name is the name of your website and what comes after the @ symbol in your business email address.

Namecorp can help you check what domain names are available and register your preferred name so no one else can take it. Plus, when you register your domain name with Namecorp, we offer free website design.

Business Insurance

There are different types of insurance cover that businesses may require. Here are the common ones:

• Public Liability Insurance – This protects you and your employees from any injury or property damage to third parties. This could be things like someone slipping on a wet floor or if a team member damages a customer’s property while carrying out renovations. Not having this insurance or not having the correct level of insurance could cost hundreds of thousands of dollars in compensation. Hence, it’s essential to consider, even for small businesses.

• Professional Indemnity – if your business provides advice or service, then Professional Indemnity insurance is a must. It protects against liability for damages and legal costs associated with defending yourself if an issue with your work or a breach of professional duty causes financial losses. 
• Business Insurance – designed to cover the general property of the business, such as stock or laptops, from losses such as fire, storm, and theft. 
• Business Interruption – this covers costs that incur due to unforeseen circumstances that require you to stop trading temporarily.
  
  
• Management Liability Insurance – this insurance protects the people who run the company against risks of mismanagement. This could range from fines, penalties, OH&S issues, unfair dismissal, and breaches of duty.

• Cyber Liability Insurance protects you if your website is hacked and your customer or sensitive data is breached.

• Tax Audit Insurance –  tax audit insurance is designed to provide protection by covering expenses incurred during an audit or investigation, including professional fees from accountants, lawyers, bookkeepers, and other required advisors.

As part of a Namecorp membership, we offer discounted insurance through our partners.

Liquidation

Liquidation is the process of ‘liquidating’ a company’s assets, i.e. turning the assets into cash to pay off debts when a company closes or deregisters. During liquidation, a liquidator is appointed to oversee the process. The liquidator’s job is to help the company cease trading as cost-effectively as possible and has complete control over the company’s operations, financial affairs, and assets.

Bankruptcy

This is sometimes confused with liquidation. Liquidation applies to the companies, but bankruptcy applies to individuals, including sole traders and partners in a partnership.

Voluntary Administration

This brings in a professional to help a business in financial trouble overcome its issues. The aim is to return to regular trading. However, sometimes liquidation could be an outcome of this process too.

How Namecorp Can Help

Setting up and running a business can be complicated. However, at Namecorp, we’re here to make setting up a business more straightforward, and as registered agents of ASIC and the ATO, you know you can trust we’ll get your business fully compliant.

We can help you:

• Set up an ABN
• Set up an ACN
• Register a business name
• Check availability and register a domain name
• Register a trademark
• GST registration
• Get discounted business insurance
• Get a professional website
• Get a crafty logo design

Get your business set up with one easy application.

Disclaimer: All information provided on this webpage is general information about our business in Australia, and products and services. Nothing on this webpage is intended to be professional advice and should not be relied on as such. You should obtain specific financial, legal, or other professional advice before relying on the content of this webpage. By not seeking such advice, you accept the risk that the information on this webpage may not meet the specific needs of your business. Our liability is limited to the maximum extent permitted by applicable law in accordance with our website terms and conditions.