In Australia every company is issued with an Australian Company Number or “ACN”. The purpose of an ACN is to ensure that a company is properly identified when conducting important aspects of its business.

The ACN was introduced in the 1990s in response to the growing realisation that as more and more companies were being incorporated for a variety of purposes there was an increasing risk of misidentification or other confusion due to the proliferation of similar or misspelt company names.

The Corporations Act is the statute that governs company law in general, and ACNs in particular. Its section 153 says that the ACN must appear on the front page of every public document which a company issues in relation to a transaction or to bind it in some way.

What is a ‘public document’? The Act lists nine types, with one of the most important being contracts and other written agreements where the company intends to be contractually bound. Other examples include statements of account and invoices, negotiable instruments such as cheques, business letterheads and orders for goods and services.

In a number of cases company documents or papers do not require an ACN. Examples include packaging and labelling, advertisements which do not make a specific offer (in other words, most advertising), automatically generated receipts, ‘with compliments’ slips and other miscellaneous paperwork.

What happens if a company fails to show its ACN on one of its public documents? Whilst the Act does not specifically invalidate the document in question, it provides for financial penalties of at least $1000 per offence. As a practical matter it’s difficult to see how such a penalty could be levied, but the main risk may be that the public document in question is regarded as having less than full effect. For example, if a company does not show its ACN in a contract the other party may argue that the company is not properly bound, and proceed to walk away from the transaction.

These days it will often be a company’s Australian Business Number or ‘ABN’ that will appear on a public document, rather than its ACN. The ABN was introduced in 2001 as part of the GST laws. The new number’s purpose is to identify all businesses, not just companies for tax collection purposes.

Accordingly, another section of the Corporations Act, section 1344, comes to the rescue. It says that a company may display its ABN on public documents instead of its ACN provided the last nine digits of the ABN are the same as its ACN. Such similarity of identifying numbers is almost invariably the case.

In recent years there has been a proposal to harmonise the ACN and the ABN, doing away with the former so that for simplicity’s sake the latter performs the functions of both. Currently this is not as easy as it sounds, with the courts recently affirming the importance of an ACN for other legislation such as the Personal {Property Securities Act. So don’t discard your ACN yet!