Closing your business

It can be a difficult decision to close your business, and may take some time to take care of everything. 

To help you through the process, we recommend you take a look at our How to close your business guide.

Check our step-by-step guide to closing your business.

We've also provided information below to help you understand your tax and reporting obligations when closing (or pausing) your business.

Business registrations

If you have temporarily ceased some of your trading activities but intend to restart your business when you can, you’re not required to cancel your ABN and GST registrations. Even if you have paused your business for a lengthy or uncertain period.

If you’re permanently closing your business as a result of COVID-19, you will need to make sure your tax affairs are finalised before you cancel your ABN.

You need to cancel:

  • your ABN within 28 days from when you cease your business activities
  • your GST registration within 21 days from when you cease your business activities

Before your close your business you need to lodge your final activity statement. This allows the Australian Taxation Office (ATO) to finalise your account and issue any refunds that might be owed to you.

Learn more about cancelling your business registrations.

Tax and super obligations

If you’re closing your business you will need to continue to meet your tax and super obligations, including:

  • fringe benefits tax
  • pay as you go withholding
  • eligible termination payments for your employees
  • super guarantee for your employees
  • capital gains tax (CGT)
  • GST

Super guarantee contributions

You’re still required to pay the minimum amount of super guarantee for your employees into the correct fund by the due date. This will be based on their eligible earnings for the quarter.

If you cannot pay the full super guarantee contributions, pay as much as you can to their fund by the due date. This will reduce the super guarantee charge. You will need to lodge a super guarantee charge statement within a month of the due date and pay the charge to the ATO. If you’re having trouble paying the super guarantee charge, the ATO can work with you to set up a payment arrangement.

Record keeping requirements

If you’re closing your business, you will need to keep business records relating to:

  • sales (including the sale of your business and assets) and purchases
  • payments to employees
  • payments to other businesses

Each industry and each record type has different requirements for how long and how secure you need to keep your records. Generally, you should keep records for a minimum of 5 years.

Learn more about record keeping if you’re closing your business.

Single Touch Payroll (STP)

If you’re pausing or closing your business due to COVID-19, you will need to keep your STP records up-to-date. STP reporting includes important information that the ATO may be able to use through these unprecedented times. Having the most up-to-date employment information will help the ATO support the community.

If you’re STP reporting, this what you can do:

  • If you have had to let employees go, make sure you report their cessation date in your STP report. If you have already paid them their final pay, you can still tell us this information by submitting an update event.
  • If you won’t be paying employees for a while, you or your registered tax or BAS agent can let the ATO know that you have no further requirement to report. You can do this through
    • the Business Portal (employers) – select Manage employees, then STP deferrals or exemptions
    • Online services for agents – select Business, then STP deferrals and exemptions

Finalise your STP data as soon as possible for employees who have finished employment. You don’t need to wait until the end of financial year to finalise STP data.

Learn more about finalising your Single Touch Payroll data.

Paused your business and worried about debt?

If you’ve paused your business, you may be concerned about debt and the risk of bankruptcy or insolvency procedures. The Australian Government has made some changes under COVID-19 that may help. New protections are in place from 25 March 2020 until 25 September 2020.

Under the changes:

  • you can’t be forced into bankruptcy if your debt is under $20,000
  • if you receive a bankruptcy notice (for a debt of more than $20,000) then the time you have to respond has been extended from 21 days to 6 months

This effectively gives you 6 months to decide on a plan to manage your serious financial difficulty.

If you’re a company director, the changes provide relief from personal liability for insolvent trading.

Find out more about the changes to bankruptcy and insolvency laws

More information

Find out the things you need to consider when changing, selling or closing your business.