Do you have a company that is no longer trading and you continue to pay ASIC fees year after year?
Apply to voluntarily deregister the company before the next annual review period and avoid paying your next annual ASIC fee. You can apply as late as three weeks before the due date of the ASIC payment and you won’t have to worry about ongoing company compliance or ASIC fees again.
There are many benefits from deregistering a dormant company, rather than leaving it active. Once deregistered, the officeholders are released from their ongoing legal and tax obligations. They no longer need to keep the company details up to date with ASIC or maintain the corporate register. The directors no longer need to pass an annual solvency resolution, or lodge nil tax returns or incur annual ASIC fees. Furthermore, if the company has appointed an ASIC agent or tax agent, you will no longer incur professional service fees to assist with the ongoing management of the company.
The process for a Members' Voluntary Deregistration is relatively straight forward, provided the company meets certain conditions.
All members of the company must agree to the deregistration. The company cannot be insolvent, or have any outstanding liabilities, or have assets worth more than $1,000. ASIC will reject an application if the company has unpaid ASIC fees or penalties. This includes any outstanding industry funding levies.
CorpSec Services uses a thorough deregistration checklist to guide clients through the process. If your company has share capital valued at more than the $1,000 threshold, we can also assist with a reduction of capital in order to meet this condition.
When a company is deregistered, it is struck off the ASIC register and the company ceases to exist as a separate legal entity. Any property found to be owned by the company after deregistration, ‘vests’ in ASIC. Accordingly, all assets should be identified, sold or transferred prior to commencement of deregistration to minimise the risk of any assets being forfeited to ASIC. Once deregistered, the company can no longer do anything in its own right.
It is also very important that the company has no outstanding liabilities or legal proceeding at the time of deregistration. A creditor or aggrieved third party wanting to commence legal proceedings against the company can apply to ASIC or the court to have the company reinstated at any time during or after deregistration.
If your company does not meet the conditions for deregistration you may need to consider voluntarily 'winding up' the company, which involves a more costly and thorough process to close a company. A wind up involves selling the company's assets and distributing the proceeds amongst its creditors and shareholders and requires the appointment of an external liquidator. We recommend that you obtain legal and accounting advice in relation to your affairs to ensure the voluntary deregistration procedure is suitable for your purposes. The more complex the trading history of a company and its balance sheet, the more care that needs to be taken and the deregistration process (although much more cost effective) may not be suitable for your purposes.
To avoid having to pay your next Annual Company Statement fee, contact us well in advance of your next review period to commence the voluntary deregistration process. Your application for deregistration must be approved by ASIC at least one week before your annual review fee is due for payment. Even if you have already received your Annual Company Statement for the current year, we may still be able to lodge your deregistration application in time to avoid payment of the ASIC fee.
CorpSec Services is not in favour of letting a company be deregistered by ASIC to avoid paying outstanding ASIC fees. ASIC-initiated deregistrations due to non-payment of ASIC fees or non-compliance is unbecoming and reflects poorly on the directors and members. It can also impact on their credit rating. We advocate proper corporate governance, which includes following proper due diligence when closing a company.