- Voluntary deregistration suits small, solvent, inactive companies with assets under A$1,000 and no debts.
- Liquidation is a formal winding up run by a liquidator, used when a company has assets to distribute or debts to resolve.
- Insolvent companies cannot simply deregister and should seek a registered liquidator without delay.
Company liquidation is the formal process of winding up a company, selling any assets, settling debts and removing the business from the register. Many owners assume it is the only way to close down, yet three paths exist: you can liquidate, you can deregister, or you can keep the company dormant until you decide.
Choosing the wrong one wastes time and money, or leaves obligations you thought were behind you. The right choice hinges on whether the company is solvent, still holds assets, and whether you might trade again. Working with professional accountant services removes the guesswork.
How do you close a company in Australia?
Closing a company in Australia means picking one of three routes: voluntary liquidation, voluntary deregistration, or keeping the company dormant while it stays registered. The right route depends on the company’s solvency, its remaining assets, and whether the members all agree to close.
Deregistration is the simplest and cheapest exit, but it is only open to small, solvent, inactive companies. Liquidation is a formal process that suits companies with assets to distribute or debts to resolve. Keeping a company dormant buys time when the future is uncertain.
Reversing a decision is possible but rarely simple. A deregistered company can sometimes be reinstated, and a dormant company can be revived, yet each backward step adds cost and paperwork. Choosing the right path first is almost always cheaper than correcting it later.
The table below maps the three options side by side.
| Option | When it applies | Process | Cost (indicative) | Timeframe | Best for |
|---|---|---|---|---|---|
| Voluntary liquidation | Company has assets, debts or complexity to wind up (solvent or insolvent) | Appoint a liquidator; declaration of solvency (solvent) or creditors’ appointment (insolvent) | Liquidator fees, commonly several thousand dollars upward (indicative only) | Several months to over a year | Companies with assets to distribute or debts to resolve |
| Voluntary deregistration | Solvent, inactive, assets under A$1,000, all members agree | Lodge ASIC Form 6010 | Application fee A$52 (Form 6010, from 1 July 2026; confirm current amount) | About two months after ASIC publishes its notice | Small dormant companies with no debts |
| Keep dormant | Future uncertain; you may trade again | Stay registered and meet annual review and lodgement duties | ASIC annual review fee A$342 (from 1 July 2026) plus ongoing compliance | Ongoing | Owners pausing rather than closing |
What is voluntary liquidation, and when does it apply?
Voluntary liquidation is a formal winding up where a liquidator takes control of the company, sells its assets, pays creditors and distributes any surplus to members. It applies when a company is too complex or asset-heavy for a simple deregistration, or when it can no longer pay its debts. There are two forms, and solvency decides which one.
Members’ voluntary liquidation (solvent companies)
A members’ voluntary liquidation applies when the company can pay its debts in full. The directors make a declaration of solvency and the members pass a special resolution to wind the company up, then a liquidator finalises its affairs. ASIC records the declaration through Form 520.
Creditors’ voluntary liquidation (insolvent companies)
A creditors’ voluntary liquidation applies when the company cannot pay its debts. A registered liquidator must be appointed, and creditors take a central role in the process. If you suspect insolvency, get advice before acting, because directors carry personal duties once a company is insolvent.
TIPBefore you appoint anyone, confirm your director records and financials are current. Clean general purpose financial statements make a liquidator’s job faster and cheaper.
Is deregistration the simpler path for solvent, inactive companies?
Deregistration is the simplest and cheapest exit, though it is only open to small companies that meet every ASIC eligibility condition. Unlike liquidation, it needs no liquidator and no formal winding up.
Your company must satisfy all of the following, verified on asic.gov.au as at 22 July 2026:
- All members (shareholders) agree to deregister.
- The company is not carrying on business.
- The company’s assets are worth less than A$1,000.
- The company has no outstanding liabilities, such as unpaid wages.
- The company is not a party to any legal proceedings.
- All fees and penalties owed to ASIC have been paid.
You lodge Form 6010 and pay the application fee, which ASIC does not refund even if it rejects the application. Apply at least two weeks before your annual review fee is due, or you may still have to pay it. About two months after ASIC publishes its notice, the company is deregistered.
What does it cost to keep a company dormant?
Keeping a company dormant is not free, because you still pay the ASIC annual review fee and meet ongoing obligations even when the business does not trade. The annual review fee for a small proprietary company is A$342 from 1 July 2026. Late payment attracts penalties, so a dormant company left unmanaged can quietly build up debts to ASIC.
A dormant company must still lodge what the law requires and keep its details current. Directors must also consider matters such as directors’ fees and reporting throughout. This route suits owners who expect to trade again within a year or two, but if you never reactivate it, you will eventually need to deregister or liquidate anyway.
What does each closure path cost?
Costs vary widely across the three paths, from a small government fee to several thousand dollars for a liquidator. The figures below are indicative and should be confirmed before you commit.
- Voluntary deregistration: the ASIC Form 6010 application fee is A$52 from 1 July 2026; confirm the current amount before you lodge. This fee is not refunded if ASIC rejects your application.
- Liquidation: a registered liquidator charges professional fees that commonly run into several thousand dollars and depend on the company’s size and complexity. These ranges are indicative only.
- Keeping dormant: budget for the A$342 ASIC annual review fee (from 1 July 2026), plus bookkeeping and lodgement costs each year.
Timeframes affect cost too. A liquidation can run for several months or longer, and a liquidator’s fees reflect the work involved, so a company with few assets and no disputes is cheaper to wind up than one with contested claims. Deregistration, by contrast, carries only the one-off ASIC fee once you have tidied the company’s affairs yourself.
Company-specific fees for professional support are quoted case by case, so ask for a written quote rather than relying on a range.
What do you need to finalise first?
Before you close, settle every tax, employee and ASIC obligation, because unfinished items can block deregistration or expose directors later. A tidy exit protects you from penalties and reinstatement headaches.
Work through the essentials in order:
- Lodge final tax returns and business activity statements, and pay any amounts owing to the ATO.
- Cancel your GST registration, PAYG withholding and, when appropriate, your ABN.
- Pay outstanding wages, superannuation and entitlements to employees.
- Distribute or dispose of company assets, since leftover assets can vest in ASIC after deregistration.
- Close bank accounts and keep records for the required retention period.
Company secretary tasks matter here too, so review the company secretary duties that apply while the company is still registered.
What if the company is insolvent?
If the company cannot pay its debts as they fall due, stop and seek advice from a registered liquidator or qualified insolvency professional straight away. This article is general information, not legal or insolvency advice.
Trading while insolvent can make directors personally liable, so the safe step is early advice. An insolvent company usually cannot be deregistered and may need a creditors’ voluntary liquidation or another formal process. A registered liquidator will explain the options and your duties as a director.
Early advice also protects value. A qualified professional can review options such as voluntary administration or a small business restructure before liquidation becomes the only choice. Directors should keep clear records of the decisions they make once cash flow tightens.
How Sleek helps you close your company cleanly
Sleek helps you weigh liquidation, deregistration and dormancy, then handles the finalisation work so nothing is missed. Our registered agents and tax specialists manage the ATO and ASIC steps, and connect you with insolvency support if the company is not solvent. For complex closures, our tax accountant team keeps your final returns clean.
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Frequently Asked Questions
Can I stop a deregistration after I have applied?
You can ask ASIC to stop a voluntary deregistration if you change your mind, and it will review your request and respond within 28 days. A third party such as a creditor can also apply to defer deregistration for an initial period of 30 days while legal proceedings are pursued. Contact ASIC in writing with the company name and ACN.
What happens to company assets left behind after deregistration?
Any assets still held when a company is deregistered usually vest in ASIC or the Commonwealth, which is why you should dispose of them beforehand. You should also cancel any Australian financial services licence or credit licence the company holds before deregistering. Recovering vested property later can be slow and costly.
Does a members' voluntary liquidation have a solvency time limit?
Directors making a declaration of solvency must state that the company can pay its debts in full within 12 months of the winding up beginning. The meeting to pass the special resolution must be held within five weeks of that declaration. Missing these steps can invalidate the process.
Can I reinstate a company after it has been deregistered?
A deregistered company can be reinstated by ASIC or by a court in defined circumstances. Once reinstated, the company is treated as though it was never deregistered, so directors resume their roles and property vests back with the company. This is one reason a clean closure matters.
Is a liquidator always required for a solvent company?
A members’ voluntary liquidation involves appointing a liquidator to wind up a solvent company, but voluntary deregistration does not require one at all. That difference is why deregistration is far cheaper for a small, dormant company with no debts. Larger solvent companies with assets to distribute usually still choose liquidation.
How does insolvency change a director's position?
Directors can be held personally liable for debts a company incurs while it is insolvent, and insolvent trading can attract civil and criminal penalties. Getting early advice from a registered liquidator helps directors meet their duties and reduce exposure. Acting quickly is almost always better than waiting.
What is simplified liquidation?
Simplified liquidation is a streamlined form of creditors’ voluntary liquidation available to eligible small companies with debts below a set threshold. It reduces the time, cost and reporting involved in a standard winding up. A registered liquidator can confirm whether a company qualifies.
