Essential exiting tasks

BUSINESS INFORMATION

When closing or selling your business, it’s important to address obligations such as lease agreements, cancelling business and tax registrations, and maintaining proper record storage.

Deciding whether to sell or close your business is a key decision.

Deciding whether to sell or close your business is a significant choice. Several factors may lead to this decision, including:

Insufficient revenue or profitability
A desire to step away from managing the business
Changes in lifestyle or personal circumstances
Pursuing new opportunities or ventures
The size, profitability, and structure of your business can also play a role in determining whether to sell or shut it down.

Tip

The Australian Tax Office has a series of information and short courses to guide you through selling or closing a small business.

Terminating Business Registrations, Including Business Name and Tax Details

When you decide to sell or shut down your business, it is essential to inform the Australian Tax Office (ATO) to complete the following steps: Submit final returns: File all activity statements, PAYG withholding reports, repay GST credit refunds, and settle any outstanding tax liabilities.

Cancel your GST registration

This must be completed within 21 days of ceasing operations.

Cancel your ABN

Ensure this is completed within 28 days of ceasing business operations.

Note that cancelling

your ABN will also void your AUSkey and GST registrations, so ensure all reporting and payment obligations are fulfilled beforehand.

Fulfill record-keeping requirements

Tax law mandates retaining records for five years, including sales documentation (such as the sale of your business), employee payments, and transactions with other businesses.

Employees and their entitlements

Selling or closing your business involves specific responsibilities toward your employees. The specific responsibilities you have will vary based on the industrial relations system applicable to your business. These may involve:

Informing employees about the sale or closure

Paying out accrued annual or long service leave
Providing redundancy payments, if applicable

Employment records should be maintained for a minimum of seven years.

To find out more visit Fair Work (national system) or the Department of Energy, Mines, Industry Regulation and Safety (state system).

Lease agreements

If you lease business premises, selling or closing your business comes with additional obligations. Closing before the lease term ends requires you to fulfill the lease conditions, including rent payments. If selling the business, verify whether landlord consent is needed to transfer the lease.

Review your lease agreement thoroughly and seek professional advice if any terms are unclear.

Find out more about leasing commercial premises or contact one of our commercial tenancy advisers.