How to Close a Business Properly in Australia

Closing a business properly means working through four jobs in order: finalise your people, collect and settle money, cancel your tax registrations, then formally end the entity. Out of order, you hit the classic traps — a cancelled ABN that blocks your final BAS, or an ASIC fee landing months after you thought you'd finished. Here's the sequence for a sole trader and for a Pty Ltd, plus what changes if you can't pay your debts.

Answer the solvency question first

Solvent means you can pay your debts as and when they fall due, and this one question decides everything that follows. If you're solvent, you're doing a wind-down and you control the timing.

If you're not, trading on is itself the problem — insolvent trading is a personal liability for a company director. For a company with total liabilities of $1 million or less there are two cheaper paths: small business restructuring, where you keep running the business while a restructuring practitioner helps you put a plan to creditors, and simplified liquidation, a stripped-down creditors' voluntary winding up available where tax lodgements are up to date and neither the company nor its directors have used either process in the past seven years. Sole traders and partners don't get those options, because business debts are personal debts; the equivalent is a debt agreement, a personal insolvency agreement or bankruptcy through AFSA.

Deregistration never makes company debts disappear. Director penalties for unpaid PAYG withholding, GST and the super guarantee charge remain payable by you personally after the company is gone.

Tell people in the right order

1. Employees first, before customers, suppliers or social media. Finding out from a Facebook post is how a closure turns into a Fair Work claim.
2. Your accountant, co-directors and shareholders, who may see a sale or transfer that beats closing.
3. Suppliers and your landlord, early enough to negotiate rather than default.
4. Customers, with a firm last trading date and a clear answer on deposits, gift cards, prepaid work and warranties. Those obligations don't evaporate — taking money for something you already know you won't supply is a consumer law problem too.

Employees: notice, final pay and super

Employment ending because the business closes is a redundancy. Notice has to be in writing and state the last day, and how much notice you owe depends on length of service and age, with awards and contracts often requiring more than the National Employment Standards minimum. Our guide on ending employment lawfully has the notice table, the redundancy rules and a worked final pay.

Two things to get right on the way out. Final pay includes accrued annual leave, plus long service leave where the employee qualifies under your state or territory scheme — leave entitlements explained sets out what gets paid out. And employers with fewer than 15 employees don't owe NES redundancy pay, though the award or the employment contract may promise it anyway, so read both before you calculate anything.

Super still has to be paid. Under payday super the 12% super guarantee is due at the same time as salary and wages, so the final pay run's super goes out with that pay run, not next quarter. Make your Single Touch Payroll finalisation declaration as soon as the last pay is processed — you don't have to wait for July — then cancel PAYG withholding.

If the company goes into liquidation or you're made bankrupt and there's genuinely no money, employees may be able to claim wages, leave, notice and redundancy through the Commonwealth's Fair Entitlements Guarantee — a capped scheme of last resort that doesn't cover unpaid super and isn't available if you simply deregister.

Collect what you're owed, then pay what you owe

Chase your receivables before you announce the closure widely, because debtors slow down remarkably once they hear you're winding up. Send final invoices early, phone rather than email, and consider a short settlement discount if it brings cash forward — our guide to chasing unpaid invoices covers the escalation ladder.

Then work through what you owe, roughly in this order: employee entitlements, ATO and super, secured creditors, trade suppliers. Where you can't pay in full, say so early — payment plans are far more common than legal action.

Sell or transfer your assets before you close the entity. For a company that isn't optional: property still held at deregistration vests in ASIC or the Commonwealth, and getting it back is slow and expensive.

Cancel your registrations in the right order

Cancelling your ABN automatically cancels GST, PAYG withholding and the registrations attached to it, so waiting a month after your cease date and cancelling the ABN does the lot in one move. The mistake to avoid is cancelling too early: if the registrations are gone before your final activity statement and return are lodged, those lodgements can't be processed and any refund stalls.

The retained-asset trap

If you claimed GST credits on assets you're now keeping for personal use, you have to hand some of those credits back as an increasing adjustment on the final activity statement: one-eleventh of market value multiplied by business-use percentage.

Say you keep the work ute. On the day your GST registration is cancelled its market value is $22,000 and business use was 80%.

• $22,000 x 80% = $17,600
• $17,600 / 11 = $1,600 increasing adjustment

Assets whose adjustment periods have already run out are exempt — for a vehicle, usually after five complete financial years. Ask your accountant which of yours still count.

Lodge the final BAS and the final return

Lodge every outstanding activity statement, not just the last one. The final BAS covers everything up to the cancellation date, including GST on assets you sold and the retained-asset adjustment above.

Then the income tax return:

• Sole trader: report business income and expenses up to the cease date in your normal individual return. There's no separate business return.
• Partnership: a final partnership return, with each partner's share flowing into their own return.
• Company: a final company tax return. If you're paying out retained profits, franking credits and any Division 7A loans need dealing with before the company closes, not after.

If you sold assets or the business itself, capital gains tax applies, and the small business CGT concessions can reduce or remove it. The rules are fiddly and the savings large, so buy an hour of an accountant's time. Ask the ATO to stop your PAYG instalments too, or they'll keep arriving.

Closing a company: deregistration or liquidation

For a solvent Pty Ltd with almost nothing left in it, voluntary deregistration is the cheap path. You lodge ASIC Form 6010 and pay $52 (as at September 2026). Every one of these must be true:

• All members agree to deregister.
• The company has stopped carrying on business.
• Its assets are worth less than $1,000.
• It has no outstanding liabilities, including unpaid employee entitlements.
• It isn't a party to legal proceedings or under external administration.
• All fees and penalties owed to ASIC are paid.

ASIC publishes a notice of the proposed deregistration, deregisters the company about two months later, then writes to the directors.

Keep paying the annual review fee — $342 for a proprietary company (as at September 2026) — until deregistration is complete, because outstanding ASIC fees block the application. And if the company still holds more than $1,000 in assets, Form 6010 is off the table: you'll need a members' voluntary liquidation, where the directors declare the company can pay its debts in full within 12 months and a liquidator distributes what's left. That costs thousands rather than $52, so it's usually worth getting the company below the threshold first, with advice on the tax consequences.

Sole traders have no equivalent step: once registrations are cancelled and returns lodged, you're closed.

Leases, insurance, licences and digital assets

• Lease. Read the exit clauses before you say anything to the landlord. Assigning to an incoming tenant, surrendering by agreement and running out the term carry very different price tags, and make-good is often the biggest single closing cost. Our commercial lease guide explains what those clauses do.
• Insurance. Cancel from your last trading day, but keep claims-made cover such as professional indemnity running, because a claim can arrive long after you close. Ask your broker about run-off cover.
• Workers compensation and payroll tax. Lodge a final wages declaration with the state insurer and cancel the policy — unused premium is often refunded — and lodge a final payroll tax return.
• Licences and permits. Food, liquor, trade and industry licences each need separate cancellation, and several keep charging until you do.
• Digital assets. Export your data before access ends, cancel subscriptions and merchant facilities, redirect the domain and email, and mark your Google Business Profile permanently closed rather than deleting it — deleting leaves the listing live with stale details.

Keep your records after you close

Closing doesn't end your record-keeping obligations. Keep tax records for five years, counted from when you prepared or obtained the record or completed the transaction, whichever is later. Company financial records run on a separate seven-year clock under the Corporations Act, and employee records must be kept for seven years under the Fair Work Act. Those duties survive deregistration and land on the former directors. Our guide to record keeping requirements covers what to keep and in what form.

Practically: export everything out of your accounting and payroll software before you cancel the subscription, and store it somewhere you'll still be able to open in 2033.

Key takeaways

• Answer the solvency question first — a solvent wind-down and an insolvent one are completely different processes, and trading on while insolvent is a personal liability for directors.
• Tell employees before anyone else, give written notice, pay out leave, and pay the final super with the final pay run. Employers with fewer than 15 staff don't owe NES redundancy pay.
• Cancel GST within 21 days of ceasing and the ABN within 28 days — but not before the final BAS and tax return are lodged, or they can't be processed.
• Repay GST credits on assets you keep, as an increasing adjustment on the final BAS: one-eleventh of market value times business-use percentage.
• Voluntary deregistration (Form 6010, $52 as at September 2026) only works if the company has under $1,000 of assets and no liabilities. Otherwise it's a liquidation.
• Deregistering doesn't erase director penalties for unpaid PAYG withholding, GST or super, or your five and seven-year record-keeping obligations.

Where to get help

• ATO (ato.gov.au) — closing a business, cancelling registrations, final lodgements. If you owe tax you can't pay, call before the debt escalates.
• ASIC (asic.gov.au) — company deregistration, Form 6010 and business name cancellation.
• Fair Work Ombudsman (fairwork.gov.au) — notice, final pay, redundancy and employee records.
• Small Business Debt Helpline — free financial counselling on 1800 413 828, weekdays.
• AFSA (afsa.gov.au) — personal insolvency options for sole traders and partners.
• Your accountant, plus a registered liquidator or trustee if you're insolvent.