If you started a company in Australia that is now inactive, dormant, or effectively abandoned, you can’t just walk away and hope it disappears on its own.
Even if there’s no trading, you still have legal duties as a director until the company is properly closed or deregistered.
This guide explains how to wind up a company in Australia, so you understand your options, the steps involved, and what happens if you do nothing. We’ll walk through winding down operations, voluntary deregistration, liquidation, and more.
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Definition of an abandoned company in Australia
“Abandoned company” is not a formal legal term in Australia. That said, it’s commonly used to describe a company that has stopped trading, has no real business activity, and has been left inactive by its directors, but still exists on the ASIC register.
Importantly, a company that is inactive or dormant must still meet its legal obligations. The directors remain responsible until the company is properly wound down and deregistered, and it may still receive ASIC annual review notices and fees.
Here are some clear signs your company may be considered “abandoned”:
- The company is no longer trading (no customers, no projects, no active contracts).
- No income or expenses are going through the company’s books.
- The business bank account is unused for a sustained period.
- ASIC annual review notices and invoices continue to arrive each year.
- ABN is still active, but the business is not operating in practice.
Can you just leave a company inactive?
Many founders assume they can just stop using the company and let it fade away. However, in Australia, doing nothing is risky.
A company that remains registered with ASIC continues to exist as a legal entity, even if it has no activity.
Here are some key risks you face if you simply abandon a company:
- ASIC annual review charges continue each year until deregistration.
- Late fees and penalties may apply if you don’t meet annual review fees or obligations.
- Directors remain legally responsible for the company’s compliance and obligations while it is registered.
- The company must still keep financial and corporate records for the required retention periods.
- ASIC may initiate deregistration if you don’t pay your fees and fail to lodge documents, which can create issues if assets or liabilities remain.
- Association with a deregistered or non-compliant company may affect your future directorships and reputation.
These risks are why properly winding down a company before deregistering it matters.
Winding down vs deregistering a company: What’s the difference?
When people talk about how to shut down a company in Australia, they often confuse “winding down” with “deregistering”. In practice, you usually wind down a company’s operations before deregistering it.
- Winding down a company means closing its operations and finalising its affairs. You stop trading, pay your debts, deal with your assets, cancel registrations, and close your bank accounts.
- Deregistering a company is the legal step where the company is removed from the ASIC register and ceases to exist as a legal entity.
Here is a quick overview of winding down vs deregistering
| Winding Down a Company | Deregistering a Company | |
| Main focus | Closing business operations and activities. | Removing the company from the ASIC register |
| Debts and accounts | Paying debts and finalising accounts to deal with liabilities | Occurs after debts and liabilities have been cleared (for voluntary deregistration). |
| Registrations | Cancelling ABN, GST, PAYG, licences, and business names | ASIC officially closes the company as a legal entity. |
| Banking | Closing company bank accounts and merchant facilities. | No bank accounts should remain open at this point. |
| Timing | Happens before deregistration and is the practical wind‑down. | Final step in closing a company Australia‑wide via ASIC |
Your options for closing an abandoned company
There are several ways to close your abandoned company, depending on whether it has debts, assets, or ongoing activity.
Here is a quick overview.
| Option | When to Use | Cost | Debts Allowed | Who Handles It |
| Voluntary deregistration | The company is inactive; has stopped trading; has no significant assets or liabilities. | Low (ASIC fee) | No (must have no outstanding debts or liabilities). | Directors or authorised applicants |
| Members’ voluntary liquidation | The company is solvent, but you want a formal wind‑up; often required when assets or structures are more complex. | High (liquidator’s fees) | Yes, but the company must be solvent (able to pay debts in full). | Registered liquidator |
| Creditors’ voluntary liquidation | The company is insolvent or unable to pay its debts, and needs an orderly winding‑up for creditors. | High (liquidator’s fees, paid from company assets where possible) | Yes, used when the company cannot pay its debts. | Registered liquidator |
| Do nothing | Doing nothing and leaving the company on the register (not recommended). | Ongoing ASIC fees and possible penalties | — | — |
Voluntary deregistration
Voluntary deregistration is usually the simplest option for a small abandoned company that:
- Is no longer trading
- Has assets valued at less than a small threshold (currently $1,000)
- Has no outstanding liabilities
- Is not involved in any legal proceedings
To proceed, all members must agree, and you must pay all ASIC fees and penalties. Then, you can lodge an application (Form 6010) to request deregistration.
Members’ voluntary liquidation
A members’ voluntary liquidation applies to solvent companies that can pay their debts in full but need or want a formal winding‑up process managed by a liquidator.
The liquidator realises assets, pays creditors, handles tax and reporting, and distributes any surplus to shareholders. Then, they apply to have the company deregistered.
Creditors’ voluntary liquidation
Creditors’ voluntary liquidation is used where the company is insolvent, meaning it cannot pay its debts when they fall due.
A liquidator is appointed to take control of the company, realise its assets, and distribute available funds to creditors in accordance with insolvency laws. Directors lose control of day‑to‑day decisions and must cooperate with the liquidator.
Doing nothing
Doing nothing is effectively abandoning the company. This can lead to ongoing ASIC fees and possible penalties, and may eventually result in ASIC‑initiated deregistration.
You may face problems if there are remaining assets, unresolved liabilities, or tax issues. Doing nothing may also reflect poorly on you as a director, so this route is not recommended.
If you need help figuring out how to wind down your company, seek legal help early on and protect yourself from hefty legal fees and mistakes.
Step‑by‑step: How to wind down an abandoned company
If you’re ready to wind down your Australian business, here is a simple step-by-step guide. Note that some steps may vary depending on your solvency status and other factors.
1. Stop trading
Cease all business operations, sales, and services so the company clearly stops trading and doesn’t create any new liabilities.
2. Finalise company debts and liabilities
If you plan to use voluntary deregistration, pay outstanding creditors, employees, taxes, and other liabilities, so that the company has no unpaid debts.
If the company cannot pay its debts, seek advice about liquidation rather than deregistration.
3. Close company bank accounts
Once you have cleared payments and received any final income, close business bank accounts and any merchant facilities or credit lines linked to the company.
4. Cancel business registrations (ABN, GST, PAYG)
If the company has an ABN, GST, PAYG withholding, or other tax registrations, cancel them with the ATO, but only after the business has stopped and obligations are finalised.
Also, cancel any licences, permits, or business names you no longer need.
5. Lodge final tax returns
Check that you’ve lodged all company tax returns and activity statements (such as BAS), including final returns showing the cessation of business.
6. Notify ASIC of changes if required
Update ASIC details if there have been changes to the registered office or directors during the wind‑down. Ensure your contact details are up to date so you receive notices of deregistration or winding-up.
7. Apply for voluntary deregistration or liquidation
If the company is solvent, inactive, and meets the eligibility criteria, apply for voluntary deregistration through ASIC (for example, using Form 6010 online).
If the company is insolvent or more complex, work with a registered liquidator to commence members’ or creditors’ voluntary liquidation.
8. Wait for ASIC deregistration notice
You’ll receive an ASIC notice after lodging a valid voluntary deregistration application and paying the fee. If there aren’t any issues, ASIC will deregister the company after a waiting period (often around 2 months).
You’ll receive confirmation once the company is marked “deregistered” on the ASIC register.
9. Keep company records after closure
Even after deregistration, you should retain company books and records for the required retention period in case questions arise later (for example, about tax or past transactions).
Costs to wind up or close a company
Costs depend on which method you use to close a company in Australia, and on how complex the company’s affairs are.
Here is the summary of the typical costs:
| Method | Approximate Cost |
| Voluntary deregistration | ASIC application fee (a modest fixed amount; check ASIC’s current fee schedule). |
| Members’ voluntary liquidation | Roughly $3,000 – $8,000+, depending on complexity and the liquidator’s fees |
| Creditors’ voluntary liquidation | Roughly $5,000 – $15,000+, with costs often paid from company assets when available |
| Accounting/tax finalisation | Varies based on your accountant’s fees and the amount of clean‑up and final reporting needed. |
Checklist before you deregister or wind up a company
Use this checklist to confirm your company is ready for voluntary deregistration or winding up.
The company is no longer trading (all business operations have stopped).
All debts have been paid, and there are no outstanding liabilities (including employee entitlements and tax).
Company assets are worth less than the ASIC threshold for voluntary deregistration (currently $1,000).
All members (shareholders) agree to deregister the company.
There is no legal action against the company, and it is not involved in court proceedings.
Final tax returns and activity statements have been lodged, and obligations are up to date.
Business registrations (ABN, GST, licences, business names) have been cancelled or will be cancelled as part of the process.
Bank accounts, merchant facilities, and lines of credit have been closed or are in the process of closure.
If you cannot tick these items, you may need advice about liquidation or other restructuring options before you can fully close the company.
FAQ
Do I need a liquidator to close a company?
You don’t always need a liquidator to close a company. If your company is solvent, has stopped trading, has assets below the voluntary deregistration threshold, has no outstanding liabilities, and meets ASIC’s eligibility criteria, you can usually apply for voluntary deregistration yourself without appointing a liquidator.
How Lawpath can help close your company
Closing a dormant or abandoned company involves both practical steps and legal requirements. It’s easy to miss something if you try to do it alone. Lawpath offers services that can help streamline this process.
We can prepare and lodge your company deregistration applications, provide legal advice on the best course of action for your situation, and ensure broad ASIC compliance from the day you start through to when you are ready to wind down.
