A company may be deregistered either voluntarily, liquidated or struck off the register of companies by the Australian Securities Investments Commission (ASIC). ASIC may deregister a company if the company has ceased trading or has overdue fees and penalties.
If your company has been deregistered, you need to know why it was deregistered and the effects of deregistration on your company.
When can ASIC deregister a company?
The ASIC can deregister a company when:
- a company has failed to pay its annual review fee within 12 months of the due date;
- a company has not responded to a Company Compliance Notice, has failed to lodge any necessary documents in 18 months, and ASIC believes the company is no longer in business; or
- A company is in the process of being wound up with no liquidator.
How does ASIC deregister a company?
ASIC will take the following steps when deregistering a company;
- Send a letter to the company’s directors and/or liquidators to advise of the pending deregistration.
- Update the company’s status on their register to display as “Strike off status”, to indicate that a company is being deregistered.
- Post a notice on ASIC’s Published Notices website, advising a company will be deregistered in 2 months unless stopped.
- After 2 months have passed, ASIC will deregister the company and send a notice to the directors and/or liquidators to confirm deregistration.
Once a notice has been published on ASIC’s Published notices website, it cannot be removed, even if deregistration does not proceed.
What happens when ASIC deregisters my company?
Once a company is deregistered:
- it ceases to exist as a legal entity and can no longer do anything in its own right
- property the company owned (other than trust property) vests in ASIC
- property held by the company on trust vests in the Commonwealth (represented by ASIC)
- the former officeholders no longer have the right to deal with property registered in the company’s name
- any legal proceedings in which the company is a party cannot be continued (in so far as they relate to the deregistered company)
- You cannot start legal proceedings against the company.
Directors of a deregistered company must keep the company’s books for 3 years after the date of deregistration and liquidators of a company must generally keep the company’s books and records for 5 years after deregistration.
Any balance of funds in a deregistered company’s bank account will vest with ASIC and any account registered in the name of a deregistered company will be immediately frozen.
If the company remains deregistered, the account is usually closed and funds sent to ASIC’s Unclaimed Monies Unit. ASIC allows secured creditors to enforce their security to recover any outstanding debts.
If a deregistered company held a bank account as trustee of a trust, ASIC will allow the bank account to be transferred to a new trustee, where the bank is satisfied of the new trustee’s appointment.
As is evident from the above discussion, the law regarding what happens to property of a deregistered property can be complex. This is why we recommend you seek legal advice from an experienced lawyer.
How can I stop ASIC deregistering my company?
Depending on the reason why your company is being deregistered, you can stop deregistration by:
- paying your company’s annual review fee and any other outstanding fees;
- lodging any required company documents with ASIC, or
- writing to ASIC and advising that the company is still trading.
If you have been advised that ASIC intends on deregistering your company, it is important to seek legal advice immediately to stop the process of deregistration.
I applied for voluntary deregistration, but changed my mind. What can I do?
You may be able to stop voluntary deregistration by contacting ASIC by explaining why your company should not be deregistered along with any supporting evidence. For example, because your company is still in business. ASIC will delay deregistration to allow any required action to be completed.
We strongly recommend you seek legal advice from an experienced lawyer as soon as possible to give yourself the best chance of preventing your company becoming deregistered.
Conclusion
There are various reasons why ASIC can deregister your company. It is important to take immediate action and determine why ASIC has chosen to take this path, so that you can put a stop to your company’s deregistration.
This is general information only. Dealing with ASIC and attempting to stop your company from being deregistered can be an overwhelming task, and we recommend you seek legal advice without delay.
If you or someone you know wants more information or needs help or advice, please contact us on 03 9607 8279 or email [email protected].