The Australian government have implemented a requirement for directors of Australian companies to...
Company deregistration refers to the process of legally winding up a company and removing it from the Australian Securities and Investments Commission (ASIC) register. This means that the company ceases to exist as a legal entity and is no longer required to comply with various regulatory requirements such as filing annual returns, paying taxes, and maintaining financial records. This is a separate process to finalising the tax returns and business activity statements with the Australian Taxation Office.
While many business owners focus on the process of starting a company, it is equally important to consider the process of winding up a company.
There are several reasons why deregistering a company is important, including:
- Avoiding ongoing compliance costs: Once a company is deregistered, it is no longer required to comply with various legal and regulatory requirements, such as filing annual returns and maintaining financial records. This can help business owners avoid ongoing compliance costs, which can significantly burden small businesses.
- Reducing legal risk: If a company is not deregistered properly, it may continue to be liable for legal claims and obligations even after it has ceased trading. Deregistering a company properly can help reduce legal risk and ensure that all obligations are properly discharged.
- Protecting directors from personal liability: Directors of a company can be held personally liable for the company’s debts and obligations if the company is not properly deregistered. By completing the deregistration process, directors can protect themselves from personal liability.
- Closing the business properly: Deregistering a company is important to closing a business properly. It ensures that all legal and regulatory obligations are met, and that the business can be wound up in an orderly and efficient manner.
The process of deregistering a company involves several steps, including:
- Meet the requirements for deregistration:
-
- Voluntary deregistration
- all members of the company agree to deregister
- the company is not conducting business
- the company's assets are worth less than $1,000
- the company has no outstanding liabilities
- the company is not involved in any legal proceedings
- the company has paid all fees and penalties payable to ASIC or;
- Appoint a liquidator.
- Voluntary deregistration
3. Notifying ASIC: The company must notify ASIC of its intention to deregister and provide the deregistration form. ASIC will then require a payment for the deregistration.
4. Deregistration: Once all of the above steps have been completed and the deregistration invoice has been paid, ASIC will deregister the company.
Company deregistration is an important process for any business owner in Australia. It can help reduce ongoing compliance costs, protect directors from personal liability, and ensure the business is properly wound up. While the process of deregistration can be complex, seeking professional advice can help ensure that it is completed properly and efficiently.
This blog has been prepared for the purposes of general information and guidance only. It should not be used for specific advice or used for formulating decisions under any circumstances. If you would like specific advice about your own personal circumstances, please feel free to contact us on 02 9411 5422. We can help make sure the right method is used to give you the maximum possible tax deduction associated with any of these methods.
