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Prior to deregistering a company, there is a particular criteria that needs to be met and a process that needs to be followed in order to officially deregister the company.
A company is commonly deregistered in three ways:
- By the Australian Securities and Investments Commission (ASIC) shutting it down for non-compliance
- Voluntary de-registration
- Court order
For the purposes of this article, we’ll be focusing on voluntarily deregistering a company. We’ll cover:
- How to deregister a company
- The eligibility for deregistering a company
- The de-registration process with ASIC
- Costs of deregistering a company
- Trading with a deregistered company
- Legal action against companies that have been deregistered
- Outstanding liabilities
How Do I Deregister A Company?
A company can be voluntarily deregistered by filling out a 6010 application online.
Prior to filling out this application form, there are a couple of steps that need to be taken first:
- All the company assets need to be traded or sold so there is nothing left in the company’s name
- For companies that acted as a trustee, a new trustee needs to be named
- Bank accounts in the company’s name should be shut down
- Cancel all licences the company owns
- Any registered business names the company held also need to be cancelled
After completing these steps, you are generally ready to fill out the application form to deregister a company.
However, it’s still important to make sure your company has met all the requirements to be eligible for voluntary deregistration.
Am I Eligible To Deregister My Company?
In order for a company to be eligible for deregistration, it must tick the following boxes:
- If the company still owns assets, they should be worth no more than $1,000
- All members agree on the deregistration of the company
- Trading and business operations have ceased
- There are no ongoing legal proceedings the company is currently caught up in
- The company does not owe ASIC any fees
- All liabilities have been sorted
What Is The ASIC Process For Deregistering A Company?
Once you have met all your obligations and taken the relevant steps, you can then file the 6010 application form we mentioned earlier.
Remember to submit the application at least two weeks before your annual review so it can be processed prior to your company owing any outstanding fees.
What Happens When ASIC Deregisters My Company?
Once ASIC has deregistered your company, the company is no longer a legal entity. It closes down the company completely.
Therefore, once a company has been deregistered with ASIC, any duties or obligations tied to it are no longer active.
The same concept applies if ASIC forcibly deregisters a company. It’s worth noting that ASIC will only do this if they believe the company is no longer trading or they have outstanding fees with ASIC. Even then, ASIC will issue ample notice beforehand.
If you find your company about to be deregistered by ASIC, you have the option to contact ASIC and inform them of your situation or pay any late fees that are owed to them. For more information, click here.
How Much Does It Cost To Deregister A Company?
The voluntary application to deregister a company comes with a fee – you can check the relevant prices and fees on ASIC’s website.
The amount paid needs to be disclosed on the application form. If your application is rejected as you have not met all the requirements for deregistering a company, the fee cannot be refunded.
Therefore, make sure you’ve met all the requirements mentioned above to avoid going through the application process multiple times.
Can A Deregistered Company Still Trade?
No, a deregistered company is no longer eligible to trade. In fact, one of the requirements to deregister a company is to cease all trading.
Once a company is deregistered, it gives up everything that made it a legally functioning entity.
If a company continues to trade once they have been deregistered, their actions are no longer considered legitimate and they can face legal consequences.
Can You Sue A Deregistered Company?
Legal proceedings cannot be brought against a deregistered company as it is no longer considered a legal entity.
In order for legal proceedings to be brought about to a company that has been deregistered, the company will need to be reinstated.
If you are not a former director, secretary or member of the company wishing to have it reinstated, but rather, an aggrieved party hoping to bring legal action against the company, then reinstatement can only be done through a court order.
We highly recommend getting advice from a legal professional if you are considering this course of action.
What If I’m A Creditor For A Deregistered Company?
If you’re a creditor and a company that has been deregistered owes you money, then your options depend on whether you are a secured or unsecured creditor.
For a secured creditor, you retain the right to pursue any debts the company owes you. Therefore, you possess the legal standing to take possession of the security and settle any debts with it.
An unsecured creditor, on the other hand, could have a harder time settling their debts with the company. It’s advisable to see a legal professional regarding your options if you are an unsecured creditor of a company that has been deregistered.
How Do I Check If A Company Has Been Deregistered?
The ASIC Website allows a search for multiple matters regarding companies. In order to find out whether a company is being deregistered, you simply have to click on the search engine that specialises in companies being deregistered or are insolvent.
The search can be conducted by either using the company name or the Australian Company Number (ACN).
Can I Deregister A Company With Liabilities?
No, any liabilities need to be settled before a company can be deregistered. A liability can be anything that is owed by the company. Liabilities a company may have, include:
- Bills
- Loans
- Employee paychecks that have not been settled
- Taxes
- Expenses
For a company to be successfully deregistered, it’s imperative that they settle any liabilities beforehand.
| Example A chocolate company has decided to deregister their company as they no longer wish to be in business. With all the company members, directors and secretaries in agreement, they move ahead with closing company accounts, selling off assets and cancelling all their business names. The company, however, still owes their former employees their last pay-check. This is considered a liability. Once all employees have been paid off, the company can move forward with their de-registration process. |
What Happens After I Deregister My Company?
If you have successfully deregistered your company, then you are no longer required to fulfil any former duties you once had regarding the company.
As the company no longer exists, your role within it has also ceased.
Key Takeaways
Deregistering a company involves a well thought-out process. To voluntarily deregister a company, you must first meet all the required criteria and then take the necessary steps to end your company’s existence.
If you need legal assistance with company de-registration, Sprintlaw offers a Voluntary De-registration package which includes the following:
- Preparing an ASIC Form 6010
- Preparing a members’ and directors’ resolution
- Phone consultations with a Sprintlaw lawyer who can advise you on the legal issues that may apply to you
To summarise what we’ve discussed:
- The voluntary deregistration of a company can only occur when all liabilities are met, trading has ceased and all members agree to deregister the company
- Prior to filling out deregistration an application form with ASIC, make sure the company has closed company accounts and sold off assets
- Legal proceedings cannot be brought against a company that is no longer registered (the company will need to be reinstated for this to occur)
- Once a company is deregistered, all your duties towards that company are released
If you would like a consultation on deregistering a company, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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