Voluntary Deregistration vs Liquidation: How to Close a Company in Australia
Quick answer
You can close a company through voluntary deregistration if all shareholders agree, the company has stopped trading, has assets worth less than $1,000, owes no debts, isn’t involved in legal proceedings and has paid all ASIC fees. If the company has debts it can’t pay, or significant assets to distribute, it usually needs to be wound up by a registered liquidator instead.
There are two main ways to close an Australian company. Choosing the wrong one can leave you personally exposed, so it’s worth understanding both before you lodge anything.
Option 1: Voluntary deregistration
Voluntary deregistration is the simplest and cheapest way to close a company. You apply to ASIC, and if there are no objections, the company is removed from the register. It’s designed for companies that have finished trading and have nothing left to sort out.
You can only use it if ALL of these are true
- All shareholders agree to deregister the company
- The company is not carrying on business
- The company’s assets are worth less than $1,000
- The company has no outstanding liabilities, including to the ATO and employees
- The company is not a party to any legal proceedings
- All ASIC fees and penalties have been paid
How the process works
- Finalise the company’s tax: lodge all outstanding BAS and tax returns and pay any tax owing.
- Pay final wages and super, and finalise payroll reporting.
- Sell or distribute remaining assets, then close the company’s bank accounts.
- Lodge Form 6010 (application for voluntary deregistration) with ASIC and pay the small application fee.
- ASIC publishes a notice of proposed deregistration. If no one objects, the company is deregistered after about two months.
Option 2: Liquidation
Liquidation, also called winding up, is a formal process run by a registered liquidator. The liquidator takes control of the company, sells its assets, pays creditors in the order set by law and then deregisters the company. There are three main types:
- Members’ voluntary liquidation: for a solvent company that can pay all its debts, often used when there are assets or profits to distribute to shareholders.
- Creditors’ voluntary liquidation: for an insolvent company that can’t pay its debts. The directors resolve to appoint a liquidator.
- Court liquidation: ordered by a court, usually after a creditor applies because the company hasn’t paid a debt.
Which option do you need?
| Your situation | Usual option |
|---|---|
| Stopped trading, no debts, assets under $1,000 | Voluntary deregistration |
| Solvent, but assets or profits to distribute | Members’ voluntary liquidation |
| Company can’t pay its debts | Creditors’ voluntary liquidation |
| A creditor is taking the company to court | Get advice urgently; court liquidation is possible |
Tip: Never use voluntary deregistration to walk away from debts. Creditors, including the ATO, can object, and a company can be reinstated after deregistration. Directors can also be personally liable for some unpaid company debts, such as PAYG withholding and super, through director penalty notices.
What happens to leftover assets?
Any property still owned by a company when it’s deregistered passes to ASIC, so distribute or sell everything first. This includes money in bank accounts, equipment and even website domains held in the company’s name.
Before you close: the short checklist
- Lodge all outstanding BAS and the company’s final tax return
- Pay final wages, leave entitlements and super to employees
- Cancel GST registration and the company’s ABN
- Cancel any business names registered to the company
- Close bank accounts and cancel licences, leases and subscriptions
- Keep the company’s books for at least 3 years after deregistration, and tax records for 5 years
For the full list, see our closing your business checklist.
Want help closing your company?
We’ll check whether you qualify for voluntary deregistration, prepare the paperwork and lodge it, or refer you to a registered liquidator if you need one. Fixed price from $249.
Frequently asked questions
How long does voluntary deregistration take?
After ASIC accepts your application, it publishes a notice and the company is usually deregistered about two months later, as long as no one objects.
Can a deregistered company be brought back?
Yes. ASIC or a court can reinstate a company, for example if a creditor shows it was owed money. That’s why the company must have no debts before you apply.
Do I need a liquidator to close my company?
Only if the company doesn’t meet the conditions for voluntary deregistration, for example because it has debts it can’t pay or assets to distribute. Only a registered liquidator can carry out a liquidation.
Do I still need to pay the ASIC annual review fee?
Yes, until the company is deregistered. Unpaid fees can stop ASIC accepting your deregistration application.
This article is general information only, not tax, legal or financial advice. Closing a company has legal consequences. Check asic.gov.au or speak with a registered liquidator, lawyer or tax agent about your situation.
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