This guide outlines how voluntary deregistration works in Australia and the key steps required to complete it correctly.
If your company is no longer trading, you may consider voluntarily deregistering it with ASIC. Deregistration brings the company’s legal existence to an end and removes the need to meet ongoing compliance obligations such as annual reviews.
However, deregistration is not simply an administrative step. Strict eligibility requirements apply, and failure to properly wind down the company can create legal and tax risks for directors and shareholders.
What does deregistration mean?
When a company is deregistered:
- It ceases to exist as a legal entity
- It can no longer enter into contracts or take legal action
- Any property not dealt with prior to deregistration may vest in ASIC or the Commonwealth
Deregistration should only be pursued once all affairs of the company have been fully finalised.
Who can deregister a company?
Voluntary deregistration is governed by section 601AA of the Corporations Act 2001 (Cth).
A company can apply for deregistration if all of the following conditions are satisfied:
- The company is not carrying on business
- All members agree to the deregistration
- The company has no outstanding liabilities
- The company’s assets are worth less than $1,000
- The company is not a party to any legal proceedings
- All ASIC fees and penalties have been paid
If any of these conditions are not met, ASIC may reject the application.
Step 1: Ensure the company has no assets
Before applying, it is critical to ensure the company does not hold any assets.
If a company is deregistered while still holding assets:
- Those assets may automatically vest in ASIC or the Commonwealth
- Former directors and shareholders will generally lose control over those assets
Common assets that must be addressed include:
- Cash and bank accounts
- Shares or investments
- Intellectual property (e.g. software, trademarks, domains)
- Business names
- Licences and permits
- Cryptocurrency or digital assets
- Intercompany receivables
If the company acts as a trustee, a replacement trustee must be appointed and all trust property transferred before deregistration.
Step 2: Finalise all tax and regulatory obligations
Although ASIC administers deregistration, the company must first be brought up to date with the ATO.
Typically, this includes
- Lodging all outstanding BAS and income tax returns
- Paying any tax liabilities, including GST, PAYG withholding, and income tax
- Addressing superannuation obligations
- Cancelling or deregistering relevant ATO registrations (e.g. GST, PAYG withholding)
While the ATO does not issue a formal “clearance certificate”, best practice is to ensure:
- No outstanding lodgements
- No outstanding debts
- No active ATO reviews or audits
Step 3: Settle liabilities and close accounts
Before deregistration:
- All liabilities must be paid in full or formally extinguished
- All bank accounts should be closed
- Any remaining funds should be distributed appropriately
Particular care should be taken with:
- Director loan accounts
- Employee entitlements (including superannuation)
- PAYG withholding obligations
Directors can remain personally liable in certain circumstances, including through the Director Penalty Notice regime, even after deregistration.
Step 4: Obtain shareholder consent
All shareholders must formally agree to deregister the company.
This is a strict statutory requirement. In practice, consent is typically documented via:
- A signed resolution, or
- Execution of the ASIC deregistration application
Step 5: Apply to ASIC
To deregister the company, a Form 6010 (Application for Voluntary Deregistration) must be lodged with ASIC, together with the prescribed fee.
If the application does not meet legislative requirements, ASIC will reject it and will not refund the fee.
Step 6: ASIC notice and timing
Once ASIC accepts the application:
1. ASIC publishes a notice of proposed deregistration
2. A 2-month waiting period applies
3. If no objections are received, the company is deregistered
Although ASIC may process the application within 1–2 weeks, deregistration only takes effect after the 2-month notice period has expired.
Important risks and considerations
1. Reinstatement risk
A deregistered company can be reinstated by ASIC or a court in certain circumstances, including:
- Unresolved legal claims
- Undisclosed assets
- Creditor action
This can reverse the intended finality of deregistration
2. Director exposure does not entirely end
While the company ceases to exist, directors may still face exposure for pre-deregistration matters, including:
- Insolvent trading
- Breaches of directors’ duties
- Unpaid PAYG withholding, GST or superannuation
Deregistration is not a substitute for proper wind-down procedures.
3. Record keeping obligations
Company records must generally be retained for at least 7 years under the Corporations Act, even after deregistration.
4. Tax treatment of final balances
The tax treatment of items such as:
- Director loans
- Accumulated losses
- Distribution of remaining funds
depends on the specific circumstances and should be reviewed before proceeding.
Practical timing considerations
To avoid unnecessary costs:
- Consider lodging the application before the annual review fee due date
- If ASIC publishes the deregistration notice before that date, the next annual fee may not be payable
Final thoughts
Voluntary deregistration is a relatively straightforward process where the company has:
- No assets
- No liabilities
- No ongoing activity
However, errors at the pre-deregistration stage can lead to:
- Loss of assets
- Unexpected tax consequences
- Ongoing director exposure
For this reason, deregistration should be approached as a structured wind-down process, not just a form submission.
Get in touch with the Fullstack team if you need any assistance with deregistration of your entity
