So you’ve decided to wind up your company while it still has the ability to pay its debts, but how do you do it?
1. Solvency DeclarationThe directors of the company must make a solvency declaration. In this the company will be able to fully pay out any debts within 12 months of commencing the winding-up proceedings.
2. Special Resolution
A meeting must be called where the company members can pass a special resolution to decide that the company is going to be wound up. This requires at least 75% of company members (i.e. shareholders) to agree on this motion. Shareholders must also have at least 21 days’ notice of the meeting and this must be within 5 weeks of the solvency declaration.
3. Liquidation
A liquidator is appointed to collect and sell all of the company’s assets. Their remuneration and conduct are overseen by the company members. It is important to note that for proprietary companies (i.e. ‘Pty Ltd’), a liquidator does not have to be a registered company liquidator.
4. Deregistering the company
Even after your company stops trading, ASIC still requires it to pay annual fees and comply with other legal requirements. To avoid this you need to deregister your company on ASIC’s registers. It can always be re-registered and restored to the status before it was de-registered.
If you have further questions, please contact frank@franklaw.com.au
This is not legal advice.