Close your business

Closing your business can be an emotional time. But support is available to help you move forward.

Sell or dispose of your business assets and stock

Even though you're not selling your business, you still need to sell or manage your business assets when you close.

Identify what assets you need to sell. Research selling prices and the platforms you can use to sell your assets.

You may need to sell excess stock at a discount, such as a closing down sale.

Business assets can include:

• remaining stock
• tools, equipment and machinery
• property, including land or buildings
• business vehicles
• furniture, fixtures and fittings
• domain names
• intellectual property, such as patents or trademarks
• licences and permits.

Collect outstanding payments

Collect any money that customers or clients owe you. This can help make it easier to pay your final bills and obligations.

Review your unpaid invoices and follow up with any customers that miss the due date. If a customer disputes an invoice, try to resolve the issue quickly to avoid delays.

Pay outstanding bills

You must pay all outstanding bills when your business closes.

If you can’t pay your outstanding debts, speak to an accountant, insolvency practitioner or lawyer about your options immediately. You may need to declare bankruptcy (if you’re a sole trader or partnership) or follow the insolvency procedures for companies.

Change can be stressful for employees. Good communication from you will help make the change easier. 

Give your employees as much notice as possible that their employment is ending.

You must give your employees written notice. There are some situations when a notice period doesn't apply to an employee.

You can either:

• let your employees work for the notice period
• pay out the notice period (known as payment in lieu of notice)
• a combination of both.

The Fair Work Ombudsman website has more information about notice periods.

Finalise employee payments

Employee termination payments

Employment termination payments (ETPs) are lump sum, one-time payments when employees no longer work for you.

An ETP may include:

• payment in lieu of notice
• redundancy or severance pay
• a gratuity or ‘golden handshake’
• compensation for the loss of a job
• unused rostered days off
• unused sick leave.

The ATO has more information about employment termination payments and their tax implications.

Entitlement payments

Entitlements can include:

• outstanding wages
• accrued leave.

The final entitlements you need to pay your employees depends on their:

• existing contract terms
• award or enterprise agreement
• eligibility for redundancy pay
• long service leave payable.

The Fair Work Ombudsman’s final pay information will help you finalise pay to your employees.

How you let your customers know will depend on the type and size of your business. You can:

• post a notice on your shopfront
• post a message on your website
• tell customers in person
• tell customers through your business's social media channels
• hold and promote a 'closing down' sale (this also helps sell off your stock)
• send an email or letter to customers.

If your business uses suppliers, you'll need to:

• tell them that your business is closing
• confirm your last orders
• pay them any money owed.

If your business leases property, vehicles or equipment, you'll need to end the lease when your business closes.

You’ll also need to end any other ongoing contracts, agreements or subscriptions.

Read the conditions of each agreement as it may include an early termination clause and fees. If you're unsure of the conditions, contact a lawyer for professional advice.

Lodge final tax returns

Learn more about how to lodge a tax return. 

Cancel pay as you go withholding

To cancel your pay as you go (PAYG) withholding account, you can either:

• phone the ATO business line on 13 28 66
• order and complete an application to cancel registration (NAT 2955) form from the ATO
• ask your registered tax agent or business activity statement (BAS) agent.

Find out more about cancelling your PAYG withholding.

Finalise employee tax and superannuation obligations

You need to finalise all employee tax issues when you close your business. These may include:

• fringe benefits tax
• PAYG
• superannuation.

Cancel your tax registrations

You must cancel your goods and services tax (GST) registration within 21 days of stopping your business activities.

These tax registrations are automatically cancelled when you cancel your GST registration: 

• luxury car tax
• wine equalisation tax
• fuel tax credits.

Capital gains tax (CGT) and GST may apply when you close your business. For example, you may need to include GST in the price of business assets that you sell.

You may also need to make GST adjustments on your final BAS, including adjustments for assets you keep after cancelling your GST registration.

Cancel your ABN

You must cancel your Australian Business Number (ABN) within 28 days of stopping your business activities. Before you cancel, you must complete the lodgement, reporting and payment obligations for all the government agencies you deal with.

Your business might need to:

• lodge BAS
• lodge PAYG withholding reports
• repay GST credit refunds
• pay outstanding tax debts.

You can cancel your ABN online through the Australian Business Register or through your tax agent.

Find out more about cancelling your ABN.

Cancel your business name

If you don’t need your business name anymore, you'll need to tell the Australian Securities and Investments Commission (ASIC).

Learn more about cancelling your business name.

Deregister your company

If your business is a company, you need to deregister it with ASIC. A deregistered company is no longer a legal entity and cannot trade.

Until you deregister your company, it must keep meeting all its legal obligations. This includes paying the annual review fee.

Before you deregister your company:

• close the company’s bank accounts
• cancel any registered business names and licenses
• lodge the final tax return.

If you need help deregistering your company, contact a lawyer, accountant or business adviser.

Learn more about deregistering a company.

Cancel licences and permits

Contact the relevant federal, state or territory government licensing authority to cancel any licenses or permits. 

Cancel insurance policies

Go through your business insurance policies and cancel any you no longer need, such as:

• professional indemnity insurance
• workers compensation insurance
• public liability insurance
• property insurance
• product liability insurance
• ·vehicle insurance.

You may need to get run-off insurance. This is a type of liability insurance that protects you from claims made against your business after you close it. It covers any acts, errors or omissions that may have happened before your business closed.

Talk to your insurer if you need help.

You must keep some business records after your business closes, including:

• financial and transaction records
• employee records.

How long and how secure you need to keep your records differs between each industry and record type. Generally, you need to keep business records for 5 years and employee records for 7 years.

To protect your customers’ information, securely destroy or de-identify any customer records you don’t need to keep.

When you close your business, you may also need to:

• disconnect your phone, power, water and internet
• redirect your mail through Australia Post
• close your business bank accounts
• cancel your website hosting and domain name
• shut down your social media channels
• cancel payment systems, software subscriptions and other digital platforms.

Check if your state or territory has any other conditions you need to meet when closing your business.

These resources can help you manage your finances and get a fresh start in your career.