The Australian Tax Office has a series of information and short courses to guide you through selling or closing a small business.
Deciding whether to sell or close your business is a key decision.
There are many reasons to stop operating a business including:
- lack of turnover or profit
- you don’t want to run it anymore
- it no longer fits your lifestyle or personal circumstances
- wanting to do something different.
The size, profitability and structure of your business can also influence your decision whether to close or sell it.
Tip
Cancelling business registrations, including business name and tax registrations
When selling or closing your business you must contact the Australian Tax Office (ATO) to:
- Lodge final returns: Lodge all activity statements, PAYG withholding reports, repay refunds of GST credits and pay outstanding tax debts.
- Cancel your GST: This must be done within 21 days of ceasing business.
- Cancel your ABN: This must be done within 28 days of ceasing business. Cancelling your ABN will also cancel your AUSkey and GST registrations so it is important to make sure that you have met all other reporting and payment conditions.
- Record keeping obligations: Under tax law you must keep records for five years. This includes records of sales (including the sale of your business), payments to employees and payments to other businesses.
Visit the ATO website for more information, including tax return instructions for a company, partnership or trust.
If you need to transfer or cancel your business name, contact the Australian Securities and Investments Commission (ASIC).
Employees and their entitlements
You will have obligations towards your employees if you decide to sell or close your business.
The exact obligations will depend on the industrial relations system you belong to and may include:
- notifying employees that the business is to be sold or closed
- paying accrued annual or long service leave
- making redundancy payments.
You are required to keep employment records for at least seven years.
To find out more visit Fair Work (national system) or the Department of Local Government, Industry Regulation and Safety (state system).
Lease agreements
When you decide to sell or close you have obligations if you lease business premises.
If you close before the end of the lease period you must still meet the terms of your lease, including paying rent. If you sell the business, check if you need your landlord’s consent before transferring the lease.
Check your lease agreement carefully and seek professional advice if you are unsure of anything.
Find out more about leasing commercial premises or contact one of our commercial tenancy advisers.
