Australian Business Number (ABN), Tax File Number (TFN), and Goods and Services Tax (GST) Registration

A business person has been in the hospitality industry for five years as a manager. He purposes to purchase his own venue (Venue X) to move to the next level in the business. The purpose of this paper is to answer the above hypothetical scenario with respect to the registration and legal compliance requirements.

• Business Operation

The type of business chosen to be opened is the restaurant business and the facilities chosen to be operated in the Venue X are a wine shop, restaurant and accommodation.

• Business Structure

The business structure chosen for this restaurant business is a company. The sole reason and advantage of choosing this business structure is due to the separate legal personality doctrine (Salomon v Salomon, 1896). A company is separate from its members and managers as a general rule and this means the directors of a company are not liable for the debts incurred by the same. These provisions are found in section 588G (Corporations Act, 2001). Companies are better business structures when it comes to making profits. However, one of the major demerits of incorporating a company has to do with the stringent and numerous requirements of incorporation. There are options of incorporating either a company with limited or unlimited liability. A company may either be limited by shares or by guarantee. The former limits shareholders’ liability to their share value while the latter to what the shareholders guarantee, and mostly used for non-trading companies. Unlimited companies have unlimited liability whose organization is like partnerships and mostly utilized for investment companies.  

• Legal Obligations and Requirements

Every taxpaying entity, including companies, must have a Tax File Number (TFN). This is a unique identifier given by the Australian Tax Office (ATO) and is issued for purposes of paying taxes as Australian residents. Online application is available for companies at the website abr.gov.au. The other way is by completing a Tax File Number application form through a tax agent. It assists businesses when quoting to government bodies or lodging income tax.   

An Australian Business Number (ABN) is almost similar to the TFN but does not replace it. It is an eleven-digit number that identifies a business or company to the community and government. The government uses this number to establish better business demographics in a particular locality, in the planning and management of infrastructure and in disaster recovery. The process of application is simple and can be found in the Australian Business Register website (“Register for an Australian Business Number (ABN)”, 2017).

Goods and services tax (GST) is the other consumption tax that is broad-based. It is chargeable on services and goods supplied in Australia. A business of over $75,000 GST turnover annually must register for this tax. The process for registration may be either through the online portal – ATO Online Business Portal using an AUSkey – or through a tax agent. GST returns are lodged either quarterly or monthly via a Business Activity Statement (BAS).

Pay-As-You-Go withholding tax is the other requirement for companies. It is the tax that is withheld from employee bonuses, wages and salaries to be paid to the ATO. Since the proposed restaurant business at Venue X will have employees, the company must register for the same with the ATO. The process of registration can be undertaken on the ATO website.

Mandatory Insurance Policies for Business Compliance

In summary, non-compliance with the above requirements will attract monetary penalties.    

• Specialist Legal Advice

There are various sources of specialist legal advice important to the setting up of this new business. The Australian Tax Organization is an important source of legal information regarding compliance tax registration regulations (https://www.ato.gov.au/). The other important body is the Australian Securities and Investment Commission (https://www.asic.gov.au/). It is important where a company intends to create a legal presence in Australia. The third organization is the Food Authority of New South Wales (https://www.foodauthority.nsw.gov.au). It is the main body concerned with the licensing and regulation requirements of the food and beverage industry.   

Insurance Policies Requisite for Business Compliance

This paper outlines three major insurance policies mandatory for compliance with starting up a new business in Australia. Firstly, the company will require superannuation. This is a compulsory form of savings accessed by a person upon retirements. It is governed by the Superannuation Guarantee (Administration) Act 1992 (Cth). The statute requires employers throughout Australia to contribute, at the superannuation rate, certain amounts to their employees. Secondly, the company must provide its employees with workers compensation. It obliges employers to provide insurance coverage for work related injuries and diseases, among other provisions. The two principle legislation in NSW are Workplace Injury Management and Workers Compensation Act 1998, Workers Compensation Act 1987 and Workers Compensation Regulations 2003. Thirdly, the company must register for public liability insurance, which protects businesses from liability against third party injuries and property damage. The final insurance cover significant for the restaurant business is the product liability insurance which protects the company against claims for the products sold.

Statutory Reporting Requirements

An employer must keep an employee record that has a range of personal and important information (including general and pay records). The legislation governing this is the Fair Work Act 2009 and Fair Work Regulations 2009.

Licenses Required

There are numerous licensure requirements for the restaurant business ranging from building and construction to waste management and food. However, for the purposes of brevity, this paper lists three major ones. First, the business (located in NSW) requires a Hotel License (Liquor). This license is useful for premises selling liquor including accommodation and bars. Secondly, the business needs a Food Authority license, which is very salient for the foods industry. The last license required for the business is one for approval for disposal of trade waste into a sewer. This approval is requisite for discharge of commercial waste into public sewers. 

Obtaining Relevant License

According to the OLGR website of NSW, there is a process for applying for a liquor license. The website provides for downloadable versions of the registration forms and statutory requirements (Liquor Act 2007 and Liquor Regulation, 2008). The following is a flowchart of the requirements:

Non Compliance

This section highlights the several license non-compliance violations. These include illegal waste disposal, contamination of food, failure to update the licenses and pay for their fees. The potential risks to the said violations range from penalties to being ordered to close down the business premises.  To ensure compliance, the business should coordinate the various departments, encourage the various personnel to evaluate potential risks and prevent the breaches and use of technology and automation to eliminate human error (Ly et al., 2015)

Statutory Reporting Requirements

A sample template for communicating policy changes would be as follows: provide a subject/heading; include the audience like “To All Employees”; a paragraph on the policy change; explain how the policy affects the employees; and the effective date of the new policy.  

Licensee Responsibilities

There are several liquor licensee requirements. These include advertising, signage, noise, crime deterrence and incident register. With regard to signage, there are several examples of relevant signage for display. These include the “under 18” sign, denoting that liquor will not be sold to persons under that age. The other sign is a primary service authorization, which announces that the place only offers beverages as alcohol but not meals. The third sign is the breath testing sign placed next to a breathalyzer machine, where applicable.  

Regulatory Policies and Procedures

The regulatory policies for the restaurant business include Transport, Handling and Storage of Food, Waste Management, Food Handling and Hygiene, Work Health and Safety, EEO and Harassment.  

Implementation

This section briefly states the reasons for the above policies and the consequences for non-compliance with them. The EEO policy, for instance, provides that employers must provide equal opportunities to employees and applicants. The purpose of the policy is to provide treatment of employees on the basis of merit and not other factors such as sex, race or religious affiliations (Equality Act, 2010). The policy also prevents harassment of employees at the workplace. The Employment Rights Act 1994 provides that employers may incur legal liability for not adhering to the requirements of the EEO policy. The EEO is closely related to the Harassment policy.   

With respect to the waste management policy, the imperative is to prevent environmental pollution, encourage appropriate waste disposal and minimize use of resource. Failure to comply with the policy entitles the Environmental Protection Authority to issue sanctions, formal warning letters, penal notices and even penalties.  

Employer/Employee Responsibilities

An employer owes an employee the duty to provide work, remuneration, provide leave, provide accommodation, and the duty of providing safe working conditions. An employee owes the employer the duty of cooperation, obedience, honesty, good faith and the duty to take reasonable care of their health and safety and that of others (Work Health And Safety Act, 2011).

Sourcing Relevant Industry Information

This section deals with the relevant regulatory bodies that the business must comply with. The Fair Work Commission (FWC) is the body that establishes the national tribunal with regard to the workplace relations. It is important for the business to be up to date with this body since it provides the complaints mechanisms and awards for workplace related issues. The Office of Liquor, Gaming and Racing (OLGR) is the regulatory body for the liquor businesses in NSW. Compliance with the same is requisite for ensuring legal compliance with licensure requirements. The Food Standards Australia New Zealand (FSANZ) is the regulatory body for the overall food industry and is important for licensure of the hotel business. It is important for the business to comply with that body since failure to do so may attract consequences such as closure of the business.

Conclusion

This paper has reviewed the general regulatory, registration, policy and license requirements for a hypothetical business in Australia. It is noteworthy that the regulations are broad, and as such, the extent of this paper does not suffice to cover all of them.

References

Corporations Act 2001 (Cth)

Employment Rights Act 1994 (Cth)

Equality Act 2010 (Cth)

Fair Work Act 2009 (NSW) 

Fair Work Regulations 2009 (NSW)

Liquor Act 2007 (NSW)

Liquor Regulation 2008 (NSW)

Ly, L. T., Maggi, F. M., Montali, M., Rinderle-Ma, S., & van der Aalst, W. M. (2015). Compliance monitoring in business processes: Functionalities, application, and tool-support. Information systems, 54, 209-234.

Register for an Australian Business Number (ABN). (2017). Business.gov.au. Retrieved 29 April 2017, from https://www.business.gov.au/Info/Plan-and-Start/Start-your-business/Business-and-company-registration/Register-for-an-Australian-Business-Number-ABN

Salomon v A Salomon & Co Ltd [1896] UKHL 1

Superannuation Guarantee (Administration) Act 1992 (Cth)

Work Health And Safety Act, 2011 (NSW)

Workers Compensation Act 1987 (NSW)

Workers Compensation Regulations 2003 (NSW)

Workplace Injury Management and Workers Compensation Act 1998 (NSW)