Why it matters before closing
This is the reason ASIC tells a company applying for voluntary deregistration to dispose of all its assets first: otherwise they usually vest in ASIC or the Commonwealth after deregistration. ASIC describes its own power to deal with vested property as discretionary and used as a last resort, usually when other remedies are not available.
| Item | What normally happens |
|---|---|
| Property the company owned | Vests in ASIC, other than trust property. |
| Property held on trust | Vests in the Commonwealth, represented by ASIC. |
| Money in its bank account | Funds belonging to the company vest in ASIC. ASIC says the account should be frozen, and recommends that the bank give its client a reasonable opportunity, up to 60 days, to reinstate the company; if it stays deregistered, the account should be closed and the company’s funds sent to ASIC’s Unclaimed Monies Unit. |
| Land and buildings | Generally vest in ASIC or the Commonwealth. |
| Business names | Do not vest; ASIC cancels them. |
| Legal proceedings | Proceedings the company is a party to cannot be continued, so far as they relate to it, and new proceedings cannot be started against it. |
ASIC notes exceptions to its being the only one who can deal with the property: secured parties, and Land Titles Office Registrars with their powers under state and territory law, can deal with it despite deregistration.
Property that does not vest in ASIC
ASIC lists circumstances where property does not vest in ASIC or the Commonwealth. A selection:
- A company that is still registeredA company under external administration, or with a strike-off in progress, is still registered, and ASIC cannot deal with property in its name.
- Property a liquidator has disclaimedThis vests in the Crown in right of the state, and ASIC points people asserting an interest to the relevant State Crown Solicitor.
- Property of a dissolved associationAssociations are generally registered under state or territory legislation, so what happens depends on that legislation; ASIC points to the state or territory Fair Trading or Consumer Affairs department.
Land, rates and the council
ASIC’s page for councils gives a useful picture of how vested land is treated. Ordinarily, ASIC does not pay outstanding rates and does not take physical possession. Nor does it pay a deregistered company’s debts, or sell vested property so that creditors can be paid. If it does choose to sell, rates and charges are paid only out of the proceeds left after ASIC’s costs.
The property stays subject to its liabilities, including rates, and a council’s legislative power of sale remains. ASIC also has no objection to a mortgagee or other secured creditor enforcing its rights.
Who keeps the books
ASIC does not take possession of a deregistered company’s books and records, and says they should not be sent to it. Under the Corporations Act 2001:
The people who were directors just before deregistration must keep the company’s books for three years from the date it was deregistered.
A liquidator must generally keep the books and records for five years from the end of the external administration.
ASIC also notes that the ATO’s position, as ASIC understands it, is that only the company itself can obtain its documents from the ATO, so the company would need to be reinstated first.
Asking ASIC to deal with property
ASIC sets out remedies to try before applying to it, by property type: removing a mortgage, caveat or lease; transferring property to a former member or a third party; transferring trust property to a new trustee; and buying property from ASIC. There is no guarantee an application will succeed, and where ASIC decides it is not appropriate for it to act, the company may have to be reinstated so that it can deal with the property itself.
ASIC usually decides within 60 days of receiving all the requested materials, and says a settlement date is not enough on its own to make an application urgent. The other way back is reinstating the company.