Closing a company in Australia: routes, rules and your records

How to close a company in Australia

Voluntary deregistration is used when all members agree to deregister, the company is not conducting business, and the assets are worth less than $1,000. There are no outstanding liabilities. The company is not in legal proceedings, and it has paid the fees and penalties payable to ASIC. Property you leave behind usually vests in ASIC or the Commonwealth. ASIC publishes a notice, and the company may be deregistered two months after that notice. Solvent winding up is used when the company is solvent but does not meet every test for voluntary deregistration. Closing then follows a winding up rather than Form 6010. An insolvent company is outside voluntary deregistration, and the insolvent winding up is a separate process.

Dissolution and liquidation routes

The registry

ASIC. ASIC keeps the companies register and ends the registration when it approves voluntary deregistration. You apply online with Form 6010 and pay an application fee that is not refunded if ASIC rejects the application. Apply at least two weeks before the next annual review fee if you do not want to pay that fee. If ASIC approves the application, it sends confirmation and publishes a notice. Two months after that notice, the company may be deregistered and the register shows it as deregistered. If ASIC rejects the application, it tells you why. Until then, a company that is still on the register must keep meeting its legal obligations.

Employees: consultation and notice

The Fair Work Ombudsman says that after a decision to make a major workplace change, including redundancies, the employer notifies affected employees and any representatives as soon as possible, gives them the relevant information in writing, discusses the likely effects and ways to reduce them, and considers suggestions they raise. If 15 or more employees will be made redundant, the employer gives Services Australia written notice before the dismissals, stating the reasons, the number and categories of employees, and the timing. An employer must also notify or consult a union if at least one employee is a union member. Redundancy pay under the National Employment Standards applies when the employer has at least 15 employees and the employee has at least one year of continuous service. An employer with fewer than 15 employees at the time notice is given is a small business employer for that pay rule.

For staff who worked in a US state, read final paycheck and WARN rules by state.

Data protection when the company closes

The Privacy Act 1988. The Office of the Australian Information Commissioner states that section 6(1) defines personal information as information or an opinion about an identified individual, or an individual who is reasonably identifiable, whether the information is true or not and whether it is recorded in a material form or not. The same guidance says the definition is broad, and that where it is unclear you should treat the information as personal information and handle it under the Australian Privacy Principles.

The Office of the Australian Information Commissioner. The Office publishes the guidance entities use to apply the Privacy Act 1988 and the Australian Privacy Principles, including when information is personal information and when it has been de-identified.

The Office of the Australian Information Commissioner says information is de-identified under the Privacy Act when it is no longer about an identifiable individual or an individual who is reasonably identifiable. Removing a name and address alone may not meet that test. In the setting where the data will be released, the risk of re-identification must be very low, meaning there is no reasonable likelihood of re-identification. When the information is no longer needed, Australian Privacy Principle 11.2 requires reasonable steps to destroy it or de-identify it, unless it sits in a Commonwealth record.

Records to keep

Section 286 of the Corporations Act 2001. A company must keep written financial records that correctly record and explain its transactions and financial position and performance, and that would enable true and fair financial statements to be prepared and audited. Those records must be retained for 7 years after the transactions they cover are completed. The company may decide where to keep them. If records about particular matters are kept outside Australia, sufficient written information about those matters must be kept in Australia so that true and fair financial statements can be prepared, and the company must tell ASIC where that information is kept.

What this means for a data license

You give the data partner the right to use your records, with personal details removed, for AI research. Personal details are removed before anything leaves your company. Customer and staff details are never shared. You approve each system before anything is shared. To train and test AI that helps people do their jobs. Never for marketing, and never sold as contact lists. You keep ownership of your data, and full use of it in your business. You agree not to license the same records to anyone else. You sign an NDA and the licensing agreement, directly with the data partner, not with Vetrix. The partner is a US-based AI data company. We tell you the data partner's name before you sign. Read what is shared and what is removed, and read the license terms, before you decide.

You need at least 30 staff at peak, or 25 if most of your staff are in the US, and at least 2 years of records.

Related

• Closing a company by country

  Dissolution or liquidation route, registry, employee notice, and data-protection authority by country.

• Winding down

  Order of operations to wind down a company, from approval through taxes and dissolution.

• Brazil

  The state commercial board is the registry. One route is General-meeting dissolution.

• Canada

  Corporations Canada is the registry. One route is Dissolution after liquidation.

• France

  The national business register is the registry. One route is Voluntary dissolution.

• What's shared

  Which records can be licensed, which details never leave, and what you approve.

• Systems

  What common business tools do to company data after you cancel, including each vendor deletion window.

Sources

1. Australian Securities and Investments Commission. Voluntary deregistration of a company.
2. Office of the Australian Information Commissioner. What is personal information?.
3. Office of the Australian Information Commissioner. De-identification and the Privacy Act.
4. Fair Work Ombudsman. Redundancy.
5. Federal Register of Legislation. Corporations Act 2001, section 286.