You will need to finalise your financial investment in the company including loans, sales, expenses and profit. Income received as a result of finalising your affairs may be subject to tax. For example, return on investment in shares or dividends for retained profits, forgiving loans or making payments to shareholders.

Shareholders are normally entitled to the surplus that remains after a company has paid off its creditors and discharged all its outstanding liabilities in the winding up process. Shareholders that receive distributions of surplus assets in the company closing process may be liable for tax under either the deemed dividends or capital gains tax provisions.

A company officially closes when it is deregistered with the Australian Securities & Investments Commission (ASIC). Deregistration will always be the final step in closing a business.

Before you deregister make sure:

• your company bank accounts are closed
• any registered business names and licenses are cancelled
• your final tax return has been lodged.