Non-Trading Company Compliance, Record-Keeping And Closing In Australia

It’s surprisingly common for Australian startups to end up with a non trading company.

Maybe you incorporated early to protect yourself and look “investor-ready”, but the product took longer than expected. Maybe you pivoted into a different structure. Or maybe you bought a shelf company, then never launched.

Whatever the reason, a non trading company can still have legal obligations. “Not trading” doesn’t always mean “nothing to do”. You may still need to keep records, deal with ASIC notifications, and (in some cases) lodge tax-related paperwork.

In this guide, we’ll walk you through what a non trading company is, what ongoing compliance usually looks like for Australian startups, what records to keep even while you’re inactive, and how to close the company properly if it’s no longer needed.

What Is A Non Trading Company (And Why Startups Often Have One)?

A non trading company is generally a company that is registered (usually with ASIC) but is not actively carrying on business - meaning it isn’t selling goods or services, isn’t issuing invoices as part of normal operations, and isn’t generating trading revenue.

That said, the term “non trading company” isn’t a special legal category under the Corporations Act. It’s a practical description of a company that is inactive or dormant from a business operations perspective.

Common Reasons A Startup Becomes Non Trading

• Pre-launch build period: you incorporated early, but you’re still building the MVP.
• Pivot or restructure: you started in a company, then moved to a new entity (or a different structure).
• Funding or co-founder changes: you paused operations while negotiating with investors or co-founders.
• Holding assets only: the company owns IP, a domain, or equipment, but isn’t operating day-to-day.
• “Just in case” company registration: you registered the company name to lock it in, but didn’t proceed.

Does “Non Trading” Mean You Have No Risk?

Not necessarily. Even if you’re not selling anything, a company can still have:

• ongoing fees (ASIC annual review fees, accounting costs, software subscriptions);
• contracts or subscriptions in its name;
• assets (like intellectual property or cash);
• legal obligations as a registered company.

Also, directors’ duties don’t switch off just because the company isn’t trading. If the company has debts, you still need to manage solvency and act in the company’s best interests.

Do Non Trading Companies Still Need To Comply With ASIC And Company Law?

Yes. In most cases, a registered company must keep up with certain ASIC and Corporations Act requirements even while it’s not trading.

What you need to do depends on whether the company is truly dormant (no transactions and no activities) or still doing “behind-the-scenes” work (like holding IP, paying bills, or signing contracts).

Typical ASIC Obligations Even If You’re Not Trading

• Pay the ASIC annual review fee (if the company stays registered).
• Keep ASIC details up to date (addresses, officeholders, share structure and shareholders).
• Review the annual statement and correct anything that’s wrong.
• Maintain a registered office and keep documents there (or be able to provide them).

If you’re still early stage and want the company to remain available for fundraising later, you’ll usually keep the company registered and stay on top of these basics.

If You Have More Than One Founder Or Shareholder

Even with a non trading company, it’s still worth getting your “who owns what” arrangements right early - because disagreements often happen during the slow phases, not just when revenue is flowing.

A Shareholders Agreement can help set expectations around ownership, decision-making, what happens if someone leaves, and how future funding rounds might work.

Similarly, your Company Constitution should match the way you actually run the company (and any founder or investor arrangements you anticipate).

What About Tax And ATO Obligations?

The tax position of a non trading company depends on what it’s doing (even if “doing” is minimal). For example:

• If you have no income and no activity, you may still need to consider whether the ATO expects lodgements (this can depend on whether the company is registered for GST, has PAYG withholding obligations, etc.).
• If you’ve incurred expenses (software, legal, accounting) you may be creating records that affect tax outcomes later.
• If you’re paying directors or staff (even irregularly), employment tax and payroll obligations can be triggered.

Sprintlaw doesn’t provide tax advice. It’s a good idea to confirm your exact lodgement obligations with a qualified accountant, because the difference between “no trading” and “no activity at all” can matter.

What Records Should A Non Trading Company Keep?

Even if your company isn’t actively trading, you still need to keep proper records. Good record-keeping is one of the simplest ways to reduce risk, avoid admin panic later, and make fundraising or closing much easier.

As a practical rule: if the company exists, assume you should be able to prove what happened (or what didn’t happen) during the period it was inactive.

Company Records (Corporate Governance)

Your non trading company should usually keep core corporate records up to date, including:

• Register of members (shareholders) and shareholdings;
• Share issue records (if shares were issued to founders or others);
• Director and secretary details and changes;
• Resolutions and minutes documenting key decisions (even if those decisions are “we are not proceeding with launch this year”);
• Constitution and any amendments;
• option/grant paperwork if you’ve offered equity to advisors or contractors.

If you’re a sole director, you can still create written resolutions for major decisions so you have a paper trail later.

Financial Records (Even If There’s No Revenue)

“Non trading” doesn’t always mean “no transactions”. If your company pays for anything - domain renewals, SaaS tools, legal advice, accounting, or contractor work - you should keep:

• bank statements;
• receipts and tax invoices;
• subscription agreements and invoices;
• records of who approved spending (especially if there are multiple directors).

Contracts And Legal Documents You Might Still Need

A non trading company can still sign agreements (for example, with a developer building your platform, or a consultant helping with strategy). If you’re doing this, you’ll want the contracts to be clear - especially about ownership of work product, confidentiality, and payment terms.

Depending on what your company is doing in the background, useful documents can include:

• Service agreements for contractors (so you own the IP they create and expectations are clear);
• NDAs when discussing your idea with third parties;
• website terms if you have a landing page collecting leads;
• privacy documentation if you’re collecting personal information.

If you have even a basic waitlist form, you may need a Privacy Policy so people understand what you’re doing with their data.

What “Non Trading” Looks Like In Practice: Common Scenarios And How To Handle Them

Two companies can both call themselves a “non trading company” and have very different compliance needs.

Here are a few common startup scenarios and what to watch for.

Scenario 1: You’ve Built Nothing Yet (A Truly Dormant Company)

If the company has:

• no bank account activity,
• no contracts,
• no employees/contractors,
• no assets,
• no income,

…then your focus is generally on keeping ASIC details up to date and deciding whether the company should remain registered.

At this stage, the biggest risk is usually forgetting about annual obligations (like ASIC review fees) and letting things slip.

Scenario 2: You’re “Pre-Revenue” But Still Operating

Many startups describe themselves as “non trading” when they’re not generating revenue - but they’re still operating behind the scenes.

For example, you may be:

• paying developers or designers;
• building a prototype;
• testing with pilot customers (even for free);
• raising capital;
• marketing and collecting leads.

In this scenario, your company isn’t “doing nothing” - and it’s especially important to keep clean contracts and records. This is also where founders should be clear about roles, ownership and decision-making (so you don’t end up in a dispute right before launch).

Scenario 3: The Company Holds IP Or Assets Only

Some startups keep a company registered because it owns intellectual property, a domain name, equipment, or cash from prior investment.

If your company holds assets, you should be careful about:

• who controls those assets (directors and signing authority);
• what happens if the founders split;
• how IP is protected and licensed (especially if another entity is now “operating”).

It’s also worth considering whether another entity is using those assets and whether you need an intercompany licence or assignment arrangement to document it properly.

Scenario 4: You Have Staff Or Contractors (Even Casually)

If your non trading company has engaged workers, it’s important not to treat this as an “informal phase”. You still need to get the fundamentals right.

That usually includes having an Employment Contract (or a contractor agreement if they’re a contractor) and being clear on pay, hours, confidentiality and IP ownership.

Even one early hire can create obligations around workplace conduct, safety, and minimum entitlements - so it’s worth setting expectations properly from day one.

How Do I Close A Non Trading Company In Australia?

If you’ve decided the company isn’t going to be used, closing it properly is often better than leaving it sitting there. A forgotten non trading company can still rack up fees, create admin obligations, and become a loose end when you apply for finance or start your next venture.

There are a few common paths, depending on the company’s situation.

Option 1: Deregister The Company (Common For Dormant Startups)

Deregistration is usually the simplest way to close a company that meets ASIC’s deregistration criteria (for example, it’s not carrying on business, has no outstanding liabilities, and has assets of less than $1,000).

• has stopped operating;
• has no assets (or minimal assets);
• has no liabilities;
• is not involved in legal disputes.

Once a company is deregistered, it stops existing as a legal entity. That means it generally can’t enter contracts, hold assets, or run a bank account.

Practical tip: Before applying to deregister, make sure the company’s assets (even small ones like a domain name, IP, or remaining cash) are dealt with appropriately and the company is eligible to be deregistered. If you try to deregister when assets or liabilities are still in the company (or the assets exceed ASIC’s threshold), you can create avoidable complications and may need a different process.

Option 2: Members’ Voluntary Winding Up (If There Are Assets To Distribute)

If the company is solvent (can pay its debts) but has assets that need to be distributed in an orderly way, a formal winding up process may be appropriate.

This is more complex than simple deregistration, and it’s typically used when there’s something meaningful to deal with (such as remaining capital, equipment, or IP) and you want to formally finalise everything.

Option 3: Insolvency Processes (If There Are Debts)

If the company has debts it can’t pay, you should be careful about simply “walking away”. Director duties and insolvency rules can be triggered even if the business never really launched.

If you suspect the company is insolvent (or close to it), it’s worth getting professional advice early so you can choose the right process and protect yourself as a director.

Avoid These Common Mistakes When Closing A Non Trading Company

• Forgetting about subscriptions: cancel software tools, domain renewals, phone plans and any other recurring charges.
• Not documenting decisions: keep a paper trail showing directors/shareholders agreed to close the company.
• Ignoring IP ownership: if you’re starting again with a new entity, make sure IP is properly assigned or licensed rather than assumed.
• Leaving bank accounts open: deal with remaining funds, then close accounts (otherwise you can end up with messy records).
• Not checking liabilities: make sure there are no outstanding invoices, tax obligations or disputes.

Key Takeaways

• A non trading company is still a registered company, which means it usually still has ongoing compliance and record-keeping obligations.
• Even without revenue, you may still need to keep ASIC details current, pay annual fees, and maintain core corporate records (share registers, minutes and resolutions).
• “Non trading” doesn’t always mean inactive - if you’re paying contractors, building IP, collecting leads, or preparing to raise capital, your contracts and records matter.
• Keeping simple governance documents in place (like a Company Constitution and Shareholders Agreement) can prevent disputes later, especially during slow or pivot periods.
• If you’re not going to use the company, closing it properly (often through deregistration, if you meet ASIC’s criteria) is usually better than leaving it sitting in the background with ongoing obligations.

If you’d like a consultation about your non trading company (whether you’re keeping it compliant, getting documents in place, or closing it down), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.