Australia Closing a Business Guide
closing a business in Australia. The guide covers: the deregistration of the ABN (the "ABN cancellation") — the business operator must cancel the ABN if the business is no longer carried on; the ABN cancellation is done through the "Australian Business Register" (the "ABR") — the online cancellation through the www.abr.gov.au; the ABN must be cancelled within 28 days of the cessation of the business (the "cancellation period"); the ATO may cancel the ABN if the business has not lodged the "business activity statements" (the "BAS") for the 12 months or if the ATO determines that the business is no longer carrying on the enterprise; the cancellation of the GST registration — the GST registration must be cancelled if the GST turnover drops below the $75,000 threshold (or $150,000 for the non-profit) AND the business does NOT expect to exceed the threshold in the next 12 months; the GST cancellation is done through the ATO Business Portal or the registered tax agent; the final BAS must be lodged within 28 days of the cancellation; the company deregistration with the ASIC (the "ASIC deregistration") — the company must be deregistered with the "Australian Securities and Investments Commission" (the "ASIC") when the company ceases the business; the deregistration process: (a) the "voluntary deregistration" — the company applies for the deregistration if the company has the "assets below $1,000", the "no outstanding liabilities", and the "consent of the members" and the "directors", (b) the "ASIC-initiated deregistration" — the ASIC may deregister the company if the company has not lodged the "annual review" or the "annual return" for the 12 months; the deregistration fee is $49 (the "voluntary deregistration fee"); the company liquidation (the "liquidation" or the "winding up") — the liquidation is the process of the "winding up" of the company by the "liquidator" (the "registered liquidator" — the "insolvency practitioner"); the liquidation can be: (a) the "members' voluntary liquidation" (the "solvent liquidation" — the company is solvent and the members resolve to wind up the company), (b) the "creditors' voluntary liquidation" (the "insolvent liquidation" — the company is insolvent and the creditors resolve to wind up the company), (c) the "court-ordered liquidation" (the "compulsory liquidation" — the court orders the winding up of the company); the liquidator realises the assets, pays the creditors, and distributes the surplus to the members; the final tax return (the "final company tax return") — the company must lodge the final company tax return (the "final tax return for the company") for the period from the end of the last income year to the date of the deregistration or the liquidation; the final return must include: (a) the "income up to the date of the cessation", (b) the "expenses up to the date of the cessation", (c) the "capital gains on the disposal of the business assets" (the "CGT on the cessation of the business"), (d) the "distribution of the surplus to the members" (the "dividends in the liquidation" — the "liquidator's distributions"); the employee entitlements upon the closure — the employer must: (a) pay the "outstanding wages and the salaries" (the "outstanding wages"), (b) pay the "annual leave" and the "long service leave" (the "accrued leave entitlements"), (c) pay the "redundancy pay" (the "redundancy pay" under the "Fair Work Act 2009" — up to 16 weeks of the pay depending on the length of the service), (d) provide the "notice of termination" (the "notice period" — up to 5 weeks depending on the age and the length of the service), (e) pay the "superannuation guarantee" (the "SG on the outstanding wages" — the employer must pay the SG on the wages up to the date of the cessation); the ATO payment arrangements — the business that cannot pay the outstanding tax can apply for the "payment plan" (the "PAYG instalment plan" or the "payment arrangement") with the ATO; the ATO charges the "general interest charge" (the "GIC" at 10.43% per year for the 2025-26 year) on the unpaid tax. All amounts in Australian Dollars (AUD). For related reading, see our Starting a Business Guide → and Tax Filing Procedures Guide →.
ABN Cancellation Steps
- 28-day window: The ABN must be cancelled within 28 days of the cessation of the business. The cancellation is done through the ABR website (www.abr.gov.au). The business must ensure that the "final BAS" and the "final tax return" are lodged before the ABN cancellation.
- Consequences: If the ABN is NOT cancelled, the business may receive the "notice of the lodgement" (the "ATO reminder" to lodge the BAS) and may be subject to the "failure to lodge penalties". The ABN cancellation is free.
For the company deregistration with the ASIC and the liquidation process, see our Starting a Business Guide →.
Employee Entitlements
- Fair Entitlements Guarantee (FEG): If the employer is insolvent and cannot pay the employee entitlements, the employees may apply for the "Fair Entitlements Guarantee" (the "FEG") — the government scheme that pays the outstanding wages, the annual leave, the long service leave, the redundancy pay, and the notice of termination. The FEG is administered by the "Department of Employment and Workplace Relations".
- Superannuation guarantee: The employer must pay the SG at 11.5% on the wages up to the date of the cessation. The SG must be paid by the quarterly due date (28 July, 28 October, 28 January, 28 April). The employer that does NOT pay the SG is liable for the "Superannuation Guarantee Charge" (the "SGC").
For the ATO payment arrangements and the general interest charge, see our Tax Filing Procedures Guide →.