Ending your business: What to watch out for

Ending your business is just as important as starting one, but many small business owners aren't always aware of the problems they may face when the time comes to wind up the shop. There are usually a few main reasons to exit your business: when you retire, financial woes or simply for personal reasons. Whatever the reason, there are a few pointers to keep in mind when you decide to leave your business.

Wrap up your ATO obligations

Once you have decided that this is what you really want, you should firstly ensure you have met all lodgement, reporting and payment obligations you have to any government agencies, according to the Australian Tax Office. This can include lodging your business activity statement (remember to include GST!), PAYG reports and paying off any outstanding tax debts. Failing to do so will result in penalties.

Cancel your ABN

Next, cancel your ABN by notifying the Australian Tax Office (either through their online form, via the phone or through www.abr.gov.au if you have an Administrator AUSkey). This needs to be done within 28 days of ceasing trading, so that the changes appear on the Australian Business Register (ABR). If your business is registered for GST, you need to cancel your registration within 21 days of ceasing trading.

Cancelling your ABN will also cancel any ATO digital certificates you hold and any registrations for fuel tax credits, luxury car tax and wine equalisation tax, among others. The ATO has more information on leaving the GST system here >>

You should also notify your state's Department of Commerce and lodge a Notice of Cessation within a month after the termination of your business, although the amount of time can vary depending on where you live.

Notify relevant parties

The Western Australian Small Business Development Corporation  (SBDC) states that closing a sole trader business is the easiest since there are no employees and fewer third parties involved. If you fall into this category, you should first notify your bank, landlord, customers, suppliers, the local council and any registering bodies. The next step is to complete any ongoing contracts with customers, and sell company stock and any assets. You also need to pay off or collect any debts you owe or are owed.

Dealing with employees

If your business employs staff, you have additional responsibilities such as complying with federal or state labour relations laws. The Fair Work Ombudsman  provides information on what your employees are entitled to. This usually includes severance pay and leave entitlements such as accrued annual or long-service leave.

Whatever the reason for winding up your business, you'll have peace of mind if you tie up all the financial and administrative loose ends.

Connect with us to receive updates throughout the day:

Like us on Facebok Follow us on Twitter

Dun and Bradstreet AustraliaTop of page Dun & Bradstreet Australia Pty Ltd 2015 | D&B Small Business    *About Us    *Sitemap    *Advertise    *Privacy    *Terms & Conditions