DCK ENTERPRISE NSW PTY LTD

BUSINESS INFORMATION

Closing a business

When closing a business, key tasks include canceling registrations, fulfilling tax obligations, informing employees and settling their entitlements, and terminating or transferring lease agreements

The process can vary in complexity depending on the business’s structure and size.

Businesses typically close for two main reasons:

  • Insufficient profitability to sustain operations, or
  • The owners no longer wish to continue running the business.

Key tasks to address during closure include:

  • Cancelling business registrations
  • Meeting tax obligations
  • Notifying employees and paying their entitlements
  • Terminating or assigning lease agreements

Find out more about essential exiting tasks when closing a business.

Additionally, consider the following factors:

Business structure

The process of closing a business depends on its legal structure.

  • Finalize any active contracts
  • Sell remaining stock
  • Collect outstanding debts and settle creditor payments

Notify relevant parties, such as banks, suppliers, and regulatory bodies

Cancel the registered business name with ASIC

A partnership may be terminated if all partners mutually agree or in certain situations, including:

  • A partner provides written notice to others
  • A partner becomes legally ineligible to own a business
  • The partnership term concludes
  • A court order is issued
  • A partner passes away
  • The business declares bankruptcy

For more information read our guide to ending a partnership.

To dissolve a company, make sure the following requirements are fulfilled:

  • All members agree to deregister
  • The company ceases operations
  • The company’s assets are valued under $1,000
  • – All outstanding fees and penalties as per the Corporations Act 2001 must be settled.
  • No outstanding liabilities exist
  • The company is not involved in legal proceedings

For more information visit the ASIC website.

  • Tasks may include:
  • Lodging the final tax return with the ATO
  • Closing bank accounts
  • Deregistering the ABN
  • Winding up the trust

Bankruptcy and liquidation

If a business cannot repay its debts, it may opt for bankruptcy or liquidation.

Bankruptcy applies to sole traders or partnerships and involves legally acknowledging the inability to repay debts. Bankruptcy typically lasts three years but remains on your credit report for up to five years or longer. During this period, you may be restricted from running a business or working in certain professions.

Tip

Declaring bankruptcy is a significant decision. Explore all alternatives and seek professional advice beforehand. For more information, visit the Australian Financial Security Authority (AFSA) website.

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Liquidation is a process for companies that cannot meet their debt obligations. During this process, assets may be liquidated to settle creditor claims. It is one of the primary forms of insolvency, alongside voluntary administration and receivership.

Visit the ASIC website for useful information on insolvency for company directors.

 

More information

DCK ENTERPRISE HELPLINE

Need more information about leasing?

Our commercial tenancy advisers at DCK Enterprise are available to address any questions or concerns.

  • Call us on 00000
  • Book an online or phone appointment
  • Chat to us online

Other helpful resources

  • Financial Management
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