Not every business story has a happy ending, and some owners are deciding right now to wind down. Business.gov.au published updated guidance on closing a business in September, and the main message is simple: finish your obligations first, then cancel your registrations.

The two deadlines that matter

According to the guidance, you need to cancel your GST registration within 21 days of stopping your business activities, and your ABN within 28 days. These clocks start when you stop trading, so it pays to plan the closure date rather than let the business drift to a halt.

Sort the tax first

Before you cancel anything, the guidance says to look after your outstanding tax obligations. That generally means:

  • lodging your final tax return
  • lodging any outstanding business activity statements (BAS)
  • paying any tax debts
  • reporting income and expenses up to the date you closed

If you cancel your ABN or GST registration while lodgments are still outstanding, you can make the final clean up harder than it needs to be.

Staff, super and payroll

If you have employees, the guidance says to complete your Single Touch Payroll (STP) finalisation declaration, pay any outstanding super contributions and deal with employee entitlements. You may also need to cancel your PAYG withholding registration, and your Fringe Benefits Tax registration if you have one.

Assets and records

Selling or disposing of business assets can have GST and capital gains tax consequences, so get advice before you sell, especially for larger items or property.

Closing the doors does not end your record keeping duties. Business.gov.au says business records generally need to be kept for at least 5 years, and some records need to be kept longer depending on the type of record and your circumstances.

What to do

  • Pick a closing date and write down the 21 day and 28 day deadlines that follow from it.
  • List every registration you hold: ABN, GST, PAYG withholding, FBT and any business names or licences.
  • Finalise payroll and pay all super before you cancel anything.
  • Get your lodgments up to date and deal with any tax debt, or talk to the ATO about a plan.
  • Plan for the assets and check the tax effect before you sell.
  • Store your records somewhere safe and accessible for at least five years.

Closing a business is stressful enough without a surprise penalty at the end. Speak to your accountant early so the order of steps works for your situation.

This article is general information only and does not take your circumstances into account.