Don't Overlook Deregistration: The Importance of Properly Closing Your Company
- Arnold Shields
- Mar 20, 2023
- 3 min read
Updated: May 16
Starting a business is exciting, but knowing how to end one properly is just as crucial. Company deregistration refers to the legal process of winding up a company and removing it from the Australian Securities and Investments Commission (ASIC) register. Once deregistered, the company no longer exists as a legal entity, and the directors are relieved of ongoing compliance obligations.
It’s important to understand that this is a separate process from finalising tax matters with the Australian Taxation Office (ATO), including lodging final tax returns and Business Activity Statements (BAS).
Why You Should Deregister Your Company
If your company is no longer operating, formally deregistering can offer several key benefits:
1. Avoid Ongoing Compliance Costs
Once deregistered, you’re no longer required to:
File annual ASIC statements
Pay annual review fees
Maintain financial records
These obligations can be costly and time-consuming for a dormant company.
2. Reduce Legal Risk
A company that’s not formally deregistered may still be legally liable—even if it’s not trading. Proper deregistration ensures all obligations are finalised and the risk of future claims is mitigated.
3. Protect Directors from Personal Liability
Directors may be held personally liable if they fail to properly wind up the company. Deregistration protects directors by ensuring debts and liabilities are settled and regulatory requirements are met.
4. Close the Business Properly
Deregistering ensures a clean, legal end to your business operations. It’s a vital part of responsible business practice.
Who Can Deregister a Company?
A company can apply for voluntary deregistration if it meets all the following ASIC requirements:
All members agree to deregister
The company is no longer conducting business
Total assets are worth less than $1,000
There are no outstanding debts or liabilities
The company is not involved in any legal proceedings
All ASIC fees and penalties have been paid
If these conditions are not met, appointing a liquidator may be necessary to wind up the company formally.
The Deregistration Process – Step by Step
Step 1: Ensure Eligibility
Confirm the company meets all ASIC requirements listed above for voluntary deregistration. If not, seek legal or insolvency advice on appointing a liquidator.
Step 2: Pay All Debts
All outstanding liabilities, including taxes, loans, and supplier debts, must be paid. ASIC will not deregister a company with unpaid obligations.
Step 3: Submit ASIC Form 6010
Notify ASIC of your intention to deregister by submitting Form 6010. ASIC will issue an invoice for the deregistration fee.
Step 4: ASIC Review and Confirmation
Once payment is made and all conditions are met, ASIC will process the application. If approved, the company will be officially deregistered and removed from the register.
Don’t DIY, Get Professional Help
While it may seem straightforward, the deregistration process can become complicated if the company has hidden liabilities, assets, or tax issues. Seeking professional advice ensures a smooth, risk-free closure.
Need help with deregistering your company?
At Dolman Bateman, we guide Australian business owners through the legal and financial steps of winding up a company. Contact us today to ensure your closure is clean, compliant, and stress-free.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
