You may wish to voluntarily deregister a company that is no longer trading, especially if you no longer require it. Deregistering a company means that it ceases to exist as a legal entity. Therefore, you no longer need to pay ongoing fees. Upon deregistration, a company cannot do anything in its own right. Further, company officers have no obligations to a deregistered company, except to keep its books for at least three years following deregistration. This article explains the steps you need to take to achieve deregistration.
Who is Eligible to Deregister a Company?
You can apply to voluntarily deregister a company, if:
- all members of the company agree to deregister;
- the company is not carrying on business;
- the assets are worth less than $1,000;
- there are no outstanding liabilities;
- the company is not a party to any legal proceedings; and
- the company has paid all fees and penalties under the Corporations Act 2001 (Cth).
Once your company meets the above criteria, you should take the following steps to voluntarily deregister.
Ensure Your Company Has No Assets
Upon deregistration, any assets that the company holds will vest in the Australian Securities and Investments Commission (ASIC) or the Commonwealth (represented by ASIC). While there are exceptions, in most cases, ASIC will be the only party who can deal with the assets after deregistration. Further, after deregistration, the former officeholders of the company will no longer be able to deal with any assets registered in the company’s name.
Therefore, before you apply to deregister a company, it is a good idea to ensure that you transfer or cancel any assets that the company holds. ASIC recommends you take the following steps before applying to deregister your company:
- close all bank accounts in the company’s name;
- ensure your company has no property registered in their name (including real property, shares, trade marks, intellectual property, leases and permits);
- if the company was a trustee of a trust, appoint a new trustee and ensure that the company no longer has any trust property in its name;
- cancel or transfer all registered business names (any business names held by the company on deregistration will be cancelled);
- cancel or transfer any licences the company owns (e.g. its Australian Financial Services Licence or Australian Credit Licence).
Pay Any Outstanding Fees
Before you apply to ASIC to deregister a company, you need to pay any outstanding fees and penalties. ASIC will not approve your application to deregister a company if the company’s account shows that it owes ASIC money.
You can check the company’s current account balance online with ASIC. You can pay any outstanding fees via BPAY or by Post Billpay.
Apply at Least Two Weeks Before the Annual Review Fee Due Date
After lodging your application to voluntarily deregister a company, ASIC will publish a notice of your intentions on its website.
If ASIC releases the notice before the due date of the annual review fee, you do not need to pay the annual review fee for the following year. However, if ASIC publishes the notice after the annual review fee due date, you must pay the fee before proceeding to deregister a company.
Ensure Members Approve the Deregistration of Your Company
The members of your company need to approve its deregistration and confirm that the company meets all the criteria for voluntary deregistration.
Apply to ASIC to Voluntarily Deregister a Company
You can apply to voluntarily deregister a company by lodging a Form 6010 application for voluntary deregistration of a company, together with the applicable application fee, with ASIC. The form can be lodged online via ASIC’s website or via mail. The application to close the company can be made by the company, a director or a member.
If you apply for deregistration and do not meet all the criteria for voluntarily deregistering your company (as above), ASIC will reject your application. ASIC will not return your application fee to you. However, ASIC will provide you with reasons why your application was rejected.
If ASIC approves your application, they will confirm the deregistration of your company by writing to you. They will also publish a notice of deregistration on its website. The process can take up to two weeks. Deregistration will take place two months after ASIC publishes its notice.
If you change your mind about deregistering the company, you may be able to stop deregistration. You can do so by contacting ASIC and advising why the company should not be deregistered. ASIC will review this request and respond within 28 days. A third party can apply to ASIC to defer deregistration if they have plans to conduct, or have already commenced, legal proceedings against the company.
If your company is no longer conducting business, it may be worthwhile deregistering it to avoid unnecessary fees and obligations. Voluntary deregistration is relatively straightforward as long as the company meets ASIC’s requirements for deregistration.
If you have any questions or need assistance with voluntarily deregistering your company with ASIC, get in touch with LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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