Closing a business involves more than simply ceasing operations. Business owners should be aware that a range of record-keeping, tax and registration obligations can continue after a business has stopped trading.

The Australian Taxation Office (ATO) provides guidance to help small businesses understand their obligations when selling or closing your business.

Keep your business records

Even after your business has closed, you'll need to keep your records.

In most cases, business records must be kept for at least 5 years. Depending on the type of records and your business circumstances, some records may need to be kept for longer.

Good record keeping can help if you need to support past tax returns, meet other legal requirements, or respond to future enquiries.

Finalise your tax obligations

Before cancelling your registrations, make sure you've completed any outstanding tax obligations.

This may include:

  • lodging final tax returns
  • lodging any outstanding business activity statements (BAS)
  • paying outstanding tax debts
  • reporting business income and expenses up to your closing date.

If you permanently close your business, it's important to finalise these obligations before cancelling your GST registration and Australian Business Number (ABN). 

Meet your super obligations

If you have employees, you'll need to make sure all super obligations have been met before closing your business.

This includes paying any outstanding super contributions and ensuring employee entitlements have been addressed. If you're unsure of your obligations, seek advice early to help avoid delays or penalties.

Complete your STP reporting

If you have employees, you'll also need to finalise your Single Touch Payroll (STP) reporting.

Make an STP finalisation declaration when you close the business rather than waiting until the end of the financial year. This helps ensure former employees have the right information to lodge their tax returns. When you have finalised your STP obligations, you can cancel your PAYGW registration. This will let the ATO know that you are no longer employing staff.

Understand the tax implications of selling assets

When closing your business, you may need to sell, transfer or dispose of business assets. It's important to understand any GST and capital gains tax (CGT) implications that may apply. The tax treatment can vary depending on the type of asset and how it's disposed of.

Consider seeking professional advice if you're unsure how the sale or disposal of assets may affect your tax position.

Cancel registrations when you're ready

Once your records and obligations are sorted, you can start cancelling your registrations.

If you’re closing your business, you’ll also need to cancel your:

  • GST registration within 21 days of stopping business activities
  • ABN registration within 28 days of stopping business activities
  • PAYG withholding registration if you no longer need it
  • Fringe Benefits Tax (FBT) registration if you're registered for it.

Cancelling your GST registration may affect some, but not all, of your other registrations such as fuel tax credits, luxury car tax and wine equalisation tax. 

Get help if you need it

Closing a business can involve a range of tax, legal and financial considerations. If you're unsure what applies to your situation, consider speaking with a registered tax professional.

Getting advice early can help you understand your obligations and avoid costly mistakes. 

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