Closing a Business Properly: The Tax Exit Checklist
Reviewed by Patrick Sargent CA, Registered Tax Agent 25758613·Published 2 August 2026 · Last reviewed 2 August 2026·6 min read
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The close-down sequence
Closing a business: the order that avoids the traps
Step
What it involves
The trap skipped
1. Final payroll events
Last pays, Single Touch Payroll finalisation, super paid, termination payments coded correctly
Unpaid final super means super guarantee charge and personal director penalty exposure surviving the closure
2. Final BAS and cancel GST
Lodge to the cessation date and cancel the registration within 21 days, including the increasing adjustment for assets kept
The adjustment nobody budgets for, plus nil BAS obligations that otherwise run forever
3. Final income tax returns
Marked final, with closing-year items done properly: trading stock disposals, balancing adjustments on written-off assets, and the fate of carried losses
Assets taken personally are deemed disposals at market value - taxable, even with no buyer
4. Extract the money the right way
Sole traders already hold it. Companies face the retained profits question: small surpluses via final franked dividends, larger ones often via a members voluntary liquidation where distributions can carry franking and capital components
Deregistering a company with meaningful retained profits or assets is the expensive shortcut, and assets of a deregistered company vest in ASIC
5. Cancel the registrations
ABN, PAYG withholding, fuel tax credits, then ASIC voluntary deregistration if solvent with assets under $1,000 and no liabilities, or the liquidation path
The shell that keeps costing ASIC fees and lodgments
Closing a business: the order that avoids the traps
The taxes the exit itself triggers
Ceasing to hold assets is a capital gains event covering goodwill, premises and equipment, which is where the small business CGT concessions do their best work: even a closure that is a sale to nobody can stack toward zero. It is also where the sell versus close comparison deserves one honest look, because a business worth closing is sometimes worth more sold.
Frequently asked questions
How do I close a business with the ATO?
Final payroll and STP finalisation, final BAS with GST cancellation and asset adjustments, final tax returns marked final, then cancel the ABN and registrations, before any ASIC deregistration.
Do I pay tax on business assets I keep personally?
Yes. Assets taken out of the business are treated as disposed at market value, with GST adjustments on cancellation and capital gains or balancing adjustments in the final return.
Should I deregister my company or liquidate it?
Small clean shells suit voluntary deregistration. Companies with meaningful retained profits or assets usually extract value far more tax-efficiently through a members voluntary liquidation.
What happens if I just abandon the company?
Obligations keep accruing - nil BAS, returns and ASIC fees - penalties stack on the shell, and director exposure for old super and withholding survives.
Can the small business CGT concessions apply on closure?
Yes. Ceasing to hold active assets is a capital gains event the concessions were built for, and closures routinely stack to little or no tax with planning.
General information only - not personal tax, financial or legal advice. Consider your own circumstances or speak to a registered tax agent. Remission of penalties or interest and payment plans are decisions of the ATO and outcomes can't be guaranteed.
Years behind? It ends this week.
Closing properly costs a fraction of abandoning a company and cleaning it up later. TaxNudge runs the whole exit sequence, including any overdue periods. Book a free assessment.
