There are many reasons why you might close your business but when you do, there are also several tasks you must complete.
On this page:
Licence and registration cancellation
Business premises and lease obligations
Professional indemnity insurance
Obligations to employees
Bankruptcy and liquidation
It can cost you money if you don't cancel your business and tax regsitrations and licences correctly. Here are the key things you need to address.
Business registrations
Business names
Any business using a registered business or trading name that ceases trading needs to advise Consumer and Business Services (CBS) - phone 131 882.
Download a Cancel a business name form (PDF 37KB) from the CBS website.
If your business name is registered in other states you will need to check the cancellation processes and notify each state.
For more information, see our Business names section.
Partnerships
There are specific legal requirements under the Partnership Act 1891 if a partner wishes to retire or dissolve the partnership. There can be serious financial liabilities if these requirements are not followed. You should consult your lawyer to advise you and prepare an agreement for dissolution of the partnership.
Companies
You must make a formal application to the Australian Securities and Investments Commission (ASIC) and pay an application fee to deregister a company. Check the details of Voluntary deregistration at the ASIC website.
Other licences, permits and registrations
The range and types of licences, permits and registrations that will need cancelling will depend on the type of business and activites. Cancellation may involve all three tiers of government - federal, state and local.
Tax registrations
There will be a range of cancellations relating to taxation - including GST, ABN, PAYG, Payroll, etc - as part of closing your business.
- See the tax checklist for closing or selling your business provided by the Australian Taxation Office (ATO).
- Cancel your ABN registration - make sure you have completed all of your online transactions at the ATO before you do this.
- Cancel your GST registration within 21 days of ceasing the business. Download Leaving the GST system from the ATO website.
- Cancel your Payroll tax registration, if applicable, with RevenueSA:
RevenueSA
Phone: (08) 8204 9880
Fax: (08) 8226 3805
payrolltax@sa.gov.au
GPO Box 1353
ADELAIDE SA 5001
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There is likely to be a range of lease obligations you will need to cancel, finalise or transfer as part of closing your business. These may include leases on premises, cars, equipment, furniture, etc.
Business premises lease
Check the exit arrangements on the lease for your business premises. You may be liable for rent and other costs until the end of the lease term, even if your business has stopped trading. The most common solution is to get the lease transferred - or assigned - to a new tenant or to sub-lease the premises. However, you will need to check the terms and conditions of your lease and be aware that there are risks involved in these processes.
If you need information or advice about your lease, contact your lawyer or the Office of Consumer and Business Affairs about Retail and commercial tenancies on 8204 9533.
Other notifications when closing your business
There are likely to be other leases and commercial arrangements that will need to be terminated or finalised, including:
- leases on cars, office equipment, machinery, furniture
- notifying suppliers, business associates, customers and clients of your closing date
- organising disconnection of utilities and services such as phone, gas, electricity, water
- planning how to sell off remaining stock and assets
- closing bank accounts and paying outstanding bills.
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If you have been operating a business where you require professional indemnity insurance, you need to ensure you continue that insurance after you close the business. If you do not maintain the insurance cover you may be personally liable for any damages and costs if you are sued by a former client.
Even though you are no longer in business, former clients can still sue you over past events. If you do not maintain current insurance you will not be covered for issues that occurred while you were operating the business, even though you had applicable insurance at the time.
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There are several employment issues to consider when you close your business.
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If a business is in financial difficulty, the last step in paying creditors and dealing with debt is sometimes declaration of
bankruptcy or liquidation of the business assets. Bankruptcy is normally the term applied to an individual or sole trader, whereas liquidation normally applies to a company in receivership or administration.
If you are in financial difficulties and contemplating bankruptcy or liquidation, contact your accountant and legal adviser.
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More information
On this site
Running into difficultiesSelling a businessEmployment issuesSuccession and transition planning
Bankruptcy