Creating a closing down plan

Coronavirus (COVID-19): Debt management and tax advice

A closing down plan will give you a timeline for completing activities and a checklist of your legal requirements.

Your closing down plan should cover the following steps:

Talk to your business adviser

  • Talk to your accountant, solicitor and business adviser about legal requirements for closing your business.

Prepare to close down

  • Check the expiry dates of current leases (e.g. premises, equipment, car) and what your obligations are if you need to terminate your lease before the end of the lease period. Your solicitor can help with this process as leases can be quite complex and may have strict conditions and penalties if you need to break them early.
  • Prepare a list of your current business assets and stock and get a professional valuation.
  • Inform employees, customers, suppliers, insurers, bankers, consultants, creditors and contractors when you will be closing down. You should also tell them who to contact if they have any questions.
  • Collect any outstanding payments from customers.
  • Notify the Australian Taxation Office that you are closing your business.

Close down operations

  • Arrange to shut off water, gas, electricity, phone, internet and any other services before you close.
  • Stop operations (i.e. cease all production, sales and employment).
  • Sell or transfer your business assets. You could hold a closing down sale or advertise online to sell the stock, equipment, furniture and fixtures and fittings you no longer need.
  • Cancel your Australian Business Number (ABN), insurance policies and any other registrations.
  • Settle your business debts and arrange final payments to employees (employment termination payments).
  • Prepare final financial statements and lodge tax returns.
  • Close your business's bank accounts.

Store your records

  • Securely store your business records. You must keep records for a minimum of 5 years after your business closes.
  • If you are not legally required to retain personal records, you will need to destroy them. You should shred, pulp or destroy the paper on which the personal information is recorded, place the files in a security garbage bin and securely delete any electronic record or file from computer systems to ensure it cannot be retrieved.

Also consider...