How to Deregister a Company in Australia

When a company stops trading, completes its purpose, or makes a strategic decision to close, it may opt for deregistration. This article outlines the steps involved in how to deregister a company, the eligibility criteria, and the implications of deregistration.

Eligibility Criteria for Deregistration

Before deregistering, a company must meet specific criteria set by ASIC:

1. Ceased Trading: The company must not be carrying on business.
2. No Assets: The company’s assets must be under $1,000.
3. No Liabilities: The company must not have any outstanding liabilities, including debts, employee entitlements, or unpaid taxes.
4. No Legal Proceedings: The company must not be involved in any legal proceedings.
5. Paid Fees and Lodgements: The company must have paid all ASIC fees and penalties and have up-to-date lodgements of forms and documents.

Steps to Deregister a Company

1. Check Eligibility: Ensure the company meets all criteria for deregistration. Address any outstanding issues before proceeding if any criteria are unmet.
2. Resolve Outstanding Matters: Settle any liabilities, distribute remaining assets, and update all company records and lodgements with ASIC.
3. Complete Form 6010: Download and complete ASIC Form 6010 – Application for Voluntary Deregistration of a Company. You can access the form through ASIC’s website or complete it online via their portal.
4. Lodge the Application: Submit the completed form to ASIC along with the associated lodgement fee.
5. Notice of Deregistration: Once ASIC receives the application, it publishes a notice of the proposed deregistration in the ASIC Gazette for two months, allowing time for any objections.
6. Objections: If there are no objections during the notice period, ASIC proceeds with deregistration. If objections arise, ASIC reviews and addresses them before making a final decision.
7. Final Deregistration: After the two-month notice period, ASIC will deregister the company if no objections were raised. The company ceases to exist as a legal entity once deregistration is complete.

Implications of Deregistration

• Cessation of Legal Entity: The company no longer exists as a separate legal entity. It cannot trade, incur debts, or hold property.

• Distribution of Assets: You must distribute any remaining assets to shareholders before deregistration. Failure to do so could complicate matters if assets are found post-deregistration.

• Outstanding Debts: Directors and shareholders may become personally liable for undisclosed debts or liabilities if the company is deregistered without settling these obligations.

• Company Records: You are legally required to keep company records for at least seven years after deregistration, including financial statements and tax records.

• Revival of Deregistered Company: A deregistered company can be reinstated, but the process involves legal proceedings and can be complex and costly. Reinstatement may be necessary if assets are discovered post-deregistration or for legal reasons.

Alternatives to Deregister a Company

• Voluntary Administration: If the company is insolvent, voluntary administration may allow restructuring or orderly winding up of affairs.

• Members’ Voluntary Liquidation: If the company is solvent but needs to close, members’ voluntary liquidation allows for the distribution of assets and settlement of liabilities.

• Transfer of Business: Selling or transferring the business to another entity may allow the company to continue operating under new management.

Conclusion

Deregistering a company in Australia is a straightforward process, provided the company meets the eligibility criteria and follows the necessary steps. By resolving outstanding matters, lodging the appropriate forms, and understanding the implications, directors can ensure a smooth deregistration process.

Your local accountant at EndureGo Tax in Ashfield of Inner West Sydney can assist with the deregistration process, ensuring all financial and legal obligations are met. With professional advice and support, you can navigate the complexities of deregistering a company efficiently and effectively.