How to Close a Business in Australia: Deregistering Your ABN or Company

How to Close a Business in Australia: Deregistering Your ABN or Company

Closing a business in Australia involves several important steps to meet your legal and tax obligations. Whether you are a sole trader winding down your activities or a company seeking voluntary deregistration, doing things in the right order protects you from unexpected tax bills, personal liability, and compliance problems down the track.

Cancel Your ABN

If you are a sole trader or partnership ceasing business, cancelling your ABN is one of the first administrative steps. However, you should complete your final tax and GST obligations before cancelling.

To cancel your ABN:

  1. Go to abr.business.gov.au and log in with your myGovID
  2. Select "Update your ABN details"
  3. Choose "Cancel your ABN"
  4. Set the cancellation date — this can be effective immediately or on a future date

Only cancel your ABN once you have genuinely ceased all business activities. Cancelling before you have finished trading can cause complications with your final BAS and tax return.

Final GST and PAYG Obligations

Before or at the time of cancelling your ABN, you must meet your final GST and PAYG obligations:

  • Lodge a final BAS covering the period from your last lodgement to the date you ceased business. Include all sales made and expenses incurred up to that date.
  • Account for GST on assets you retain — if you claimed input tax credits when you purchased assets (equipment, stock, vehicles) and you keep those assets after cancellation, you must report a "decreasing adjustment" or pay GST on the value of those assets
  • Cancel GST registration — this happens automatically when your ABN is cancelled, or you can cancel it separately while retaining your ABN if you continue operating but below the GST threshold
  • Finalise PAYG withholding — if you had employees, ensure all PAYG withholding amounts have been paid and reported to the ATO

Lodge Final Income Tax Returns

Even after ceasing business, you must lodge your final tax returns:

  • Individuals (sole traders) — lodge your personal tax return for the income year in which the business ceased; report all business income up to the date of cessation; claim all outstanding deductions including any depreciation write-offs
  • Companies — lodge a final company tax return; the company remains liable for tax until deregistration is complete
  • Trusts and partnerships — each beneficiary or partner must include their share of trust or partnership income in their personal returns

If the business made a loss in its final year, you may be able to carry that loss back against prior year income (for companies) or carry it forward for use in future years.

Pay Outstanding Business Debts

Before distributing any remaining business assets to yourself or shareholders, all business debts must be paid:

  • Pay all creditors — suppliers, landlords, service providers
  • Pay all outstanding employee entitlements (see next section)
  • Settle any ATO debts (income tax, GST, PAYG)
  • Clear any bank loans or finance agreements

Distributing assets before paying creditors can expose directors of a company to personal liability under insolvent trading provisions of the Corporations Act 2001. For sole traders, your personal assets are always at risk since there is no separation between business and personal.

Employee Entitlements on Closure

If you have employees at the time of closure, their entitlements must be paid in full:

  • Unpaid wages — all wages and salary earned up to the last day of employment
  • Superannuation — all outstanding SG contributions; these must be paid before the business closes, as unpaid super can give rise to the SGC
  • Accrued annual leave — must be paid out at the employee's ordinary rate of pay
  • Redundancy pay — employees with more than one year of continuous service are generally entitled to redundancy pay; the amount depends on length of service and is set out in the National Employment Standards
  • Notice period — employees are entitled to their notice period (or payment in lieu of notice)

If the business is insolvent and cannot pay these entitlements, employees can apply to the Fair Entitlements Guarantee (FEG) — a government scheme that advances outstanding employee entitlements in cases of employer insolvency.

Deregistering a Company

Cancelling your ABN does not deregister your company — that requires a separate application to ASIC.

To apply for voluntary deregistration of a company:

  1. Apply to ASIC using Form 6010 (Application for Voluntary Deregistration)
  2. The current ASIC fee is $44
  3. To be eligible, the company must:
    • Have no outstanding liabilities
    • Hold no assets worth more than $1,000 (excluding the application fee)
    • Have no current legal proceedings or regulatory investigations outstanding
    • Have the consent of all shareholders
  4. ASIC publishes a notice of proposed deregistration; the company is deregistered approximately two months later if no objections are received
  5. Once deregistered, the company ceases to exist as a legal entity; any assets remaining vest in the Commonwealth

If the company has debts it cannot pay, voluntary deregistration is not appropriate — the company may need to go into liquidation instead.

Record Keeping After Closure

Your obligations do not end on the day you close. You must retain business records for five years:

  • Tax returns and notices of assessment
  • BAS and workpapers
  • Invoices issued and received
  • Employee records (wages, super, leave)
  • Contracts and agreements
  • Bank statements

Records can be kept electronically. Ensure they remain accessible and readable for the required period, even if you change software or storage providers.

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