To close down a company, you should apply for voluntary deregistration by preparing a Members Resolution and submitting it for assessment with the Australian Securities and Investments Commission (ASIC).
There are many reasons you might want to close down your company, ranging from simply tiring of the business and wanting to move on to a new project, to ceasing to carry on trade. We set out the steps required to deregister a company below.
Conditions for Deregistration
Aside from the consent of all members of the company, also known as the shareholders, you must first satisfy the following requirements to apply for voluntary deregistration:
- You are no longer carrying on business or trading in any way;
- The total amount of the company’s assets comes to less than $1000;
- The company is still solvent (not bankrupt or with any outstanding debts owing);
- The company is not involved as a party to any current or future legal proceedings;
- The company has paid the requisite fees, and penalties under the Corporations Act 2001; and
- The company must cancel its Australian Financial Services Licence (AFSL) or an Australian Credit Licence (ACL) if it has them.
Members Resolution
The Members Resolution is a legal document that declares the above conditions to be true of the company seeking deregistration. A lawyer or accountant must prepare this document.
Application for Voluntary Deregistration of a Company (Form 6010)
The next step is to complete Form 6010 – Application for voluntary deregistration of a company. You must submit this to ASIC along with the Members Resolution that you have had drafted, which usually takes up to a week to process.
If you change your mind about deregistering your company, get in touch with ASIC before they fully process your application. A third party can also stop deregistration if it brings legal proceedings against the company. They can apply to ASIC to defer the deregistration process, but once the company is dissolved, legal proceedings can not be commenced or continued.
What is the Result of Closing Down My Company?
ASIC will inform you in writing if your application is successful. Your company will then cease being a legal entity and will no longer exist. All property that the company still owns will automatically vest in ASIC. Any property held on trust goes to the Commonwealth. Former officeholders of the company have no legal rights to any of this property. The company directors, however, do have a continuing obligation to keep the company books for at least three years after the company has been deregistered. That includes documents, registers and financial reports.
Key Takeaways
Closing down a company is a relatively straightforward process, provided you satisfy all the requirements for the Members Resolution, and complete the relevant ASIC form. LegalVision’s business lawyers can step you through the entire deregistration process. If you have any questions or require assistance closing down your company, let us know on 1300 544 755.