How to close or wind up a small business in Australia

Published Thursday 3 September 2026

Table of contents

• Before you decide to close
• Sole trader vs company: What changes when you close
• Steps to close your business in Australia
• Winding up and deregistering a company with ASIC
• Cancelling your ABN, GST and business name
• Your responsibilities to employees
• Records you need to keep and for how long
• How much it costs to close a business
• Simplify your final accounts with Xero
• FAQs on closing a business in Australia

Key takeaways

• Closing a business in Australia means finalising your tax, cancelling registrations, and, for companies, deregistering with ASIC.
• Cancel your GST registration within 21 days and your ABN within 28 days of stopping business activities.
• A company must be wound up or voluntarily deregistered through ASIC, while a sole trader mainly ceases trading and cancels registrations.
• Keep business records for at least five years and employee records for seven years, even after you've closed.

Before you decide to close

Before you close, take time to get advice, pick a closing date, and check whether pausing might suit you better than shutting down for good. A little planning now saves you from missed lodgements and unexpected fees later.

Closing isn't always the right call. If trade has slowed for a season or you simply need a break, putting the business on hold can be far simpler than closing and starting again. It's worth thinking through your options before you commit, especially if you might trade again down the track.

Getting the timing right also helps. Lining your closing date up with the end of a BAS or reporting period can make your final lodgements cleaner and easier to manage.

• Get advice early. Talk to your accountant, a business adviser, or the ATO before you settle on a final date.
• Set a closing date. A firm date helps you plan your last invoices, payroll runs, and tax lodgements around one clear deadline.
• Weigh up pausing instead. If the slowdown is temporary, holding the business for a while can be easier than reopening from scratch.

If you want to compare pausing, selling, or closing, a plain-language small business guide can help you weigh up each path before you decide.

Sole trader vs company: What changes when you close

A sole trader closes by ceasing to trade and cancelling their registrations, while a company is a separate legal entity that must be formally wound up or deregistered with ASIC. The structure you chose when you started shapes how much paperwork you face at the end.

As a sole trader, you and the business are the same in the eyes of the law, so closing is mostly about finishing your tax and cancelling what you registered. A company keeps existing on its own until ASIC removes it, which means an extra step and ongoing obligations until that happens.

• Closing a sole trader business: Stop trading, settle your tax, and cancel your ABN, GST and business name.
• Closing a Pty Ltd company: Wind up or deregister the company through ASIC, on top of cancelling its registrations and finalising its tax.

Steps to close your business in Australia

To close a business in Australia, work through your finances, people and paperwork in a set order so nothing slips through. The numbered checklist below follows the government's official closing your business steps, so you can tick each item off with confidence.

Use this as your business closure checklist for Australia and complete the steps in sequence, because some depend on others being done first.

1. Review your finances and pay your debts. Settle what you owe to suppliers, lenders, and the ATO, and collect any money still owed to you.
2. Notify your employees, customers and suppliers. Give everyone fair warning so they can prepare, and confirm your final trading dates in writing.
3. End your contracts and leases. Check the notice periods on premises, equipment, and subscriptions so you avoid charges that roll on after you close.
4. Lodge your and tax returns. Report right up to your closing date, including any final activity statements and your last income tax return.
5. Pay outstanding tax and super. Clear your PAYG withholding, any GST owed, and employee super before you cancel your registrations.
6. Cancel your registrations. Cancel your GST, then your ABN and business name once all your reporting and payments are done.
7. Deregister your company if you have one. A company keeps its obligations until ASIC removes it from the register, so don't skip this step.
8. Keep your records safe. Store your business and employee records securely because you'll need to hold on to them well after closing.

Winding up and deregistering a company with ASIC

A company must be either wound up through liquidation or voluntarily deregistered with ASIC before it stops existing. Which path you take depends mainly on whether the company is solvent, meaning it can pay its debts in full.

A solvent company that has finished trading with no money owing can usually take the simplest route. A company that can't pay its debts is insolvent, and it needs a formal process run by a registered liquidator. The three common paths are set out below.

• Members' voluntary liquidation: a formal wind-up for a solvent company, where a liquidator confirms the company can pay its debts in full
• Voluntary deregistration: the simplest option for a small, solvent company with no outstanding debts or liabilities, where the members agree to close
• Liquidation for an insolvent company: where a company can't pay its debts, a liquidator is appointed to wind it up and deal with creditors

Until ASIC deregisters the company, its obligations continue, including the annual review fee. Voluntary deregistration suits a small, solvent company that has wrapped up cleanly and has the agreement of its members. For a closer look at each path, read ASIC's guidance on company deregistration and winding up.

Cancelling your ABN, GST, and business name

Cancel your GST registration within 21 days of ceasing to carry on business and your ABN within 28 days of stopping business activities, then cancel your business name with ASIC once you've stopped trading. Finish your lodging, reporting and payments through the ATO first, so nothing is left hanging when the registrations end.

Order matters here. Cancelling your ABN also cancels things linked to it, so complete your final obligations before you close it off.

• GST: Cancel within 21 days of ceasing to carry on business.
• ABN: Cancel within 28 days of stopping activities once you've finished lodging, reporting, and paying.
• Business name: Cancel with ASIC once you've stopped trading since a business name relies on your ABN staying active.

You can end a business name through the ASIC guidance on how to cancel a business name registration.

Your responsibilities to employees

If you employ staff, you'll need to give written notice, pay out everything they're owed and finalise your payroll obligations. Getting this right protects your team and keeps you on the right side of workplace law.

Your exact obligations depend on each person's award or agreement, so check the details before you set final dates. You can confirm entitlements with the Fair Work Ombudsman.

• Give written notice. Provide the notice period set out in each employee's award, agreement or contract.
• Pay final wages and accrued leave. Include any annual leave and long service leave they've built up.
• Finalise termination payments and super. Sort out employment termination payments, your PAYG withholding and any outstanding super.

Records you need to keep and for how long

Keep your business records for at least five years and your employee records for seven years, even after the business has closed. These records back up the tax and payments you've reported, so store them somewhere safe and easy to find.

Customer information needs care too. Once you no longer need personal data, store it securely or dispose of it properly to protect the people who trusted you with it.

• Business records: Keep tax, financial and company records for at least five years.
• Employee records: Keep pay, leave and super records for seven years.
• Customer data: Store or securely dispose of personal information once you no longer need it.

How much it costs to close a business

The cost to close a business in Australia depends on your structure, but the main expenses are ASIC fees, any liquidator costs, and your final accounting and tax work. A sole trader often pays little beyond their usual tax preparation, while a company has more to budget for.

Costs climb when a company needs a formal wind-up rather than a simple deregistration, and they vary with how complex your affairs are. The three areas below cover what to plan for so there are no surprises.

• ASIC voluntary deregistration fee: a small, set application fee to remove a solvent company from the register
• Liquidator fees: a larger cost that applies when your company needs a formal wind-up through a registered liquidator
• Final accounting and tax: the cost of preparing your last BAS, income tax return and payroll finalisation

Simplify your final accounts with Xero

Getting your final numbers in order is the last big job when you close, and it's much easier when everything sits in one place. Xero brings your final BAS, payroll finalisation and reports together, so you can hand clean, up-to-date records to your accountant and wrap things up with confidence. Get one month free and close out your books without the last-minute scramble.

FAQs on closing a business in Australia

Here are quick answers to the questions Australian business owners often ask when they're ready to close.

How much does it cost to close a company in Australia?

A solvent company usually pays a small ASIC fee for voluntary deregistration, plus its final accounting and tax costs. A company that needs a formal wind-up will also pay a registered liquidator, which is a larger and less predictable expense.

How do you permanently close your business?

Finalise your tax, pay your debts, look after your employees and cancel your registrations, then deregister the company if you have one. Permanent closure only takes effect for a company once ASIC removes it from the register.

Can you just shut down a company without deregistering it?

No. A company stays legally active and keeps its obligations, including the annual review fee, until ASIC deregisters it, so stopping trade alone doesn't end its responsibilities.

How do you close a Pty Ltd company?

Wrap up your finances and employee obligations, then choose voluntary deregistration for a small, solvent company or a members' voluntary liquidation for a larger wind-up. Insolvent companies need a registered liquidator to manage the process.

How do you close a business as a sole trader?

Stop trading, lodge your final tax returns, pay any tax and super owing, then cancel your GST, ABN, and business name within the required timeframes. There's no ASIC deregistration step because you and the business are the same legal entity.