You can deregister a company or close a company if you no longer require it. You may consider closing your company for a variety of reasons. For example, you may have stopped running your company, sold the company or are ready to retire the company. You may also be unable to physically or financially continue running your business and are therefore ready to close it. This article outlines the two processes for deregistering a company with the  Australian Securities and Investments Commission (ASIC).

Ways to Deregister a Company

If your company is solvent, you can close it in two ways:

  1. you can apply to ASIC to voluntarily deregister the company; or
  2. the members of the company can voluntarily wind it up.

The most appropriate way to close your company depends on whether or not your company is still operating. Further, it also depends on the value of your company’s assets. However, if your company is insolvent, neither of the above methods are an option. Rather, you need to consider voluntary administration or liquidation.

Regardless of the method you use to close your company, both ways result in the same outcome: deregistration. Deregistration means that the company ceases to exist as a legal entity. It can, therefore, no longer do anything in its own right. Further, any assets that the company holds on deregistration vests in ASIC or the Commonwealth.

Voluntarily Deregister a Company

You can apply to voluntarily deregister a company by lodging a form 6010 application for voluntary deregistration of a company. ASIC will accept your application to voluntarily deregister a company if your company meets the following criteria:

  • all members of the company agree to deregister;
  • it is no longer carrying on business;
  • its assets are worth less than $1,000;
  • there are no outstanding liabilities;
  • it is not a party to any legal proceedings; and
  • the company pays all fees and penalties under the Corporations Act 2001 (Cth).

Wind Up a Company

If your company does not meet the criteria for voluntary registration and it is solvent, you can wind up your company. Winding up is a process where all outstanding company matters are finalised, all company assets are liquidated, and then the company will cease to exist.

Accordingly, to wind up the company, the following steps must be taken:

  • a majority of the directors must declare that the company is solvent;
  • the members must pass a special resolution approving the winding up of the company;
  • notice of the special resolution must be passed on the ASIC’s website;
  • the company must notify ASIC if it has appointed a liquidator;
  • the liquidator winds up the company’s affairs; and
  • the liquidator finishes winding up the company and lodges its final documents.

ASIC Deregisters a Company

ASIC has the power to deregister a company if:

  • the company has not paid its annual review fee within 12 months of the annual review fee due date;
  • it does not respond to a company compliance notice from ASIC;
  • it has not lodged any documents with ASIC in 18 months and ASIC believes the company has ceased business; or
  • the company is being wound up and there is no liquidator.

ASIC starts the process by sending a letter to the company’s directors or liquidator (if there is a liquidator) to advise of the pending deregistration. ASIC also posts a notice on its website advising of the company’s deregistration in two months. Accordingly, after two months, ASIC deregisters the company and writes a confirmation letter to the directors.

However, if you wish to stop ASIC deregistering your company, you can:

  • pay the company’s annual review fee and any other outstanding fees;
  • lodge any required documents; or
  • write to ASIC informing them that the company is still in business and trading.

Key Takeaways

If your company is solvent, you can close it in two ways. You can voluntarily deregister a company through ASIC or you can wind it up. It is also important to be aware that, under certain circumstances, ASIC has the power to deregister a company.

If you have any questions or need assistance with deregistering a company, get in touch with LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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