Like you, your company exists as a separate legal entity. However, unlike your mortal self, your company cannot die a natural death. So what do you do when the company has outlived its usefulness? The Company equivalent to death is de-registration.

When a company is de-registered it no longer exists as a legal entity and cannot trade as a corporate body. Any property owned by the de-registered company will vest with ASIC. Property held on trust by the company will vest with the Commonwealth. So why bother to de-register when a company can be left to sit quietly?

If a company is de-registered, there are no legal obligations to report or pay annual fees to ASIC. Where a company is not in use and is not experiencing financial difficulties or insolvency, de-registration is a simple and cost effective option.

A company can be de-registered in two ways. A voluntary application can be made to ASIC to de-register a corporate body or the members themselves can initiate a windup and apply for de-registration. To successfully apply for voluntary de-registration, a number of criteria must be satisfied. ASIC requires that:

• Company members unanimously decide to de-register;
• The company is not carrying out any business;
• The total assets of the company are worth less than $ AUD 1,000;
• The company has no outstanding debt or liability;
• The company is not involved as a party to legal proceedings; and
• There are no outstanding penalties payable under the Corporations Act 2001 (Cth).

If these criteria are satisfied, an application can be made to ASIC by lodging a Form 6010 and paying a fee.

Applications for de-registration can be lodged by a director, secretary, liquidator or member of a company. Applications can also be made by the company itself in which case the director or secretary will apply on behalf of the company.

Alternate directors can also lodge an application if they are acting as director at the time of signing, have been appointed with the power to do so or declare that the company has met all of the criteria specified by ASIC. This declaration is not to be taken lightly as the penalty for false declarations can be as heavy as $22,000 and 5 years imprisonment! As a matter of practicality, it may be easier for an alternate director to appoint themselves as a director and lodge an application in this capacity.

If the sole director or member of a company is deceased the company executor can lodge an application for de-registration.

Any person declared bankrupt cannot lodge an application for de-registration. However a trustee of a bankrupt person can make an application. When notifying ASIC, a trustee is required to attach a cover letter and court documentation of their appointment as trustee.

Don’t be too hasty to burn those company books! It is required by ASIC that company books be kept for the next three years. Gold and Platinum members read on to find out how to deal with director penalty notices when laying your company to rest….

When a company is reinstated after being de registered the company will be returned to its exact position as if it remained registered all along.  Reinstatement can be obtained by applying directly to ASIC or to a court for an order that ASIC reinstate the company.

Gold and Platinum members read on for how to go about reinstating a company.

De-registering a company can be an easy way to put an end to the expense and hassle associated with maintaining it. However, this is not a quick fix for companies that are insolvent or facing financial strife. If you have made the decision to de-register a company, make sure this is the best option for you. Companies can be re-registered, but not without jumping through a number of hoops and running the risk of losing your company name.

• Build a Company
• Appoint an Alternate Director
• Convert to Single Director
• Remove and Replace a Director kit