How to deregister a company

There are various ways to deregister a company. A common reason is when a company is no longer carrying on business, provided certain conditions are met.

Deregistration by application to ASIC

An application to deregister a company can be lodged with ASIC by a company (a director or member) or a liquidator of a company provided the following conditions are met:

1. all members of the Company must agree;
2. the company assets must be worth less than $1,000;
3. have no outstanding liabilities, which includes unpaid employee entitlements;
4. the company cannot be party to legal proceedings; and
5. has paid all fees and penalties under the Corporations Act

Procedure

In order to voluntarily deregister a company the following procedure should be followed:

1. obtain the agreement of all members to deregistration;
2. determine whether the company is carrying on business;
3. confirm whether the assets are worth less than $1,000 from the most recent accounts of the company;
4. confirm whether the company has paid all fees and penalties due to ASIC;
5. confirm that the company has no outstanding liabilities and is not subject to legal proceedings;
6. lodge an application for voluntary deregistration of a company under Form 6010 with ASIC;

Provided there is no issue, ASIC will give notice on its database and publish notice of the proposed deregistration of the company. After 2 months, provided there is no issue, ASIC can deregister the company.

Effect of deregistration

When a company is deregistered it ceases to exist, however, directors and officers of the company can be liable for any circumstances arising before the company was deregistered.

If there is any property of the company post deregistration, it will vest in ASIC or the Commonwealth.

Reinstatement of company

A deregistered company can be reinstated by application to ASIC or the court. ASIC will reinstate a deregistered company where it is satisfied that it should not have been deregistered.

A person who has suffered some detriment by the deregistration of the company or a former liquidator of the company can apply to the court for reinstatement. The court will look at the past practice of the directors, the purpose of the reinstatement and the company’s solvency. A court should only reinstate a company if an unjust result that could not be remedied would follow.

A court can validate anything done between the period of deregistration and reinstatement of the company as well as make any other orders it considers appropriate.

ASIC is usually involved in reinstatement matters and will not oppose an application for reinstatement if it is satisfied with the matters to be determined by the court, its costs will be paid and all relevant fees paid and documents lodged. ASIC will also consider whether the company would be solvent on reinstatement.

Conclusion

Once a company is reinstated, the effect is as if the company was never deregistered. LegalVision has lawyers who can advise you in relation to deregistration of a company.