A guide to Australian company de-registration

21 January 2020

An Australian company can be deregistered either voluntarily or by ASIC.

Here’s a guide. 

In a hurry? Jump ahead below. 

Voluntary de-registration 

An application to deregister a company may be lodged with ASIC by: 

• the company; 
• a director or member of the company; or 
• a liquidator of the company. 

If it's a company that lodges the de-registration, it must nominate a person to be given notice of the de-registration. 

So what steps need to be taken before de-registration? We'll look at that criteria next. 

Criteria for de-registration

You may only deregister a company if ALL the criteria below are met. 

• all the members (aka shareholders) of the company agree to the de-registration; and
• the company is not carrying on business; and
• the company's assets are worth less than $1,000; and
• the company has paid all fees and penalties payable under this Act; and
• the company has no outstanding liabilities; and
• the company is not a party to any legal proceedings.

ASIC may ask the applicant for extra information. 

And before de-registration, ASIC will give notice of the proposed de-registration. 

Notice and publication 

ASIC must give notice and publish the proposed de-registration. 

When ASIC may de-register the company 

When 2 months have passed since the publication of the notice, ASIC may deregister the company. 

ASIC must give notice of the de-registration to: the application or the person nominated in the application to be given notice. 

And, ASIC may refuse to de-register a company.

When ASIC may refuse to de-register a company

ASIC may refuse to deregister a company if it decides to order that the company be wound up under section 489EA of the Corporations Act 2001 (Cth).

ASIC initiated de-registration

Below are the cases where ASIC may initiate de-registration: 

• the response to a return of particulars given to the company is at least 6 months late; and
• the company has not lodged any other documents under this Act in the last 18 months; and
• ASIC has no reason to believe that the company is carrying on business.
• unpaid review and levy fees or late penalties have not been paid in full at least 12 months after the due date for payment

Winding up

ASIC may decide to deregister a company if it is being would up and SSIC believes: 

• the liquidator is no longer acting
• the company’s affairs have been fully would up and a return that the liquidator should have lodged is 6 months late 
• company’s affairs have been fully would up under part 5.4 and the company has no property or not enough property to cover the costs of obtaining a Court order for the company’s de-registration.

De-registration process

ASIC will give notice of the de-registration to: 

• the company; and 
• the company’s liquidator (if any); and 
• on ASIC’s database

ASIC does not have to give notice to a person if it does not have the necessary information about the person’s identity or address.

After 2 months have passed since publishing the notice, ASIC may deregister the company. 

De-registration following amalgamation or winding up

ASIC must deregister a company if the Court orders the de-registration of the company under the Corporations Act, specifically: 

• reconstruction and amalgamation provisions: section 413(d)
• release of liquidator: 481(5)(b) 
• de-registration after the end of administration return is lodged: 509(2).

The effect of de-registration 

De-registration means that a company ceases to exist on de-registration. All property that the company held on trust (including with a liquidator) before de-registration vests in the Commonwealth. This also includes property property outside Australia’s jurisdiction. 

Property rights 

The Commonwealth or ASIC take only the same property rights that the company itself held and this includes any security or other interests or claims in that property as well. 

Record keeping 

The directors of the company must immediately before de-registration keep the company’s books for 3 years after the de-registration. 

What the Commonwealth or ASIC does with the property

If the property vests in the Commonwealth, it may: 

• continue to act as trustee; or 
• apply to a court for the appointment of a new trustee 

All property that vests in either the Commonwealth or ASIC  remains subject to any liabilities such as a security interest in or claim on the property. 

Commonwealth actions

If the Commonwealth continues to act as trustee for the property, it must: 

• in the case of money - credit the amount of the money to a special account (allowed by Public Governance, Performance and Accountability Act 2013); or 
• sell or dispose of the property and credit the same special account mentioned above. 

ASIC actions

If property vests in ASIC, it may:

• dispose or deal with the property as it sees it; and 
• apply any money it receives towards expenses and make authorised payments. 

Commonwealth and ASIC’s power to fulfil outstanding obligations

The Commonwealth or ASIC may act on behalf of the company or its liquidator if the Commonwealth or ASIC is satisfied that the company or liquidator would be bound to do that act if the company still existed. 

Claims against insurers of deregistered company

Importantly, a person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract: 

• The company had a liability to the person; and 
• The insurance contract covered that liability immediately before de-registration. 

Reinstatement

ASIC may reinstate a company if its satisfied the company should not have been deregistered.

Also, ASIC may reinstate a company under the Supervisory Cost Recovery Levy Act 2017 if: 

• ASIC receives an application for the reinstatement of the company 
• the levy or any late payment has been paid in fully. 

Court reinstatement

A court may make an order that ASIC reinstate the registration of a company if an application for reinstatement is made to the Court by a person aggrieved by the de-registration or a former liquidator of the company and the court is satisfied the registration should be reinstated. 

Do you have questions or comments about de-registration? Be sure to leave them below.