Ending an organisation - FAQs
1. If we have DGR status, does this make a difference to the process?
No, it does not change the process you must follow to wind up.
However, you do need to ensure that your organisation:
- tells the ATO in writing that you are winding up or canceling your australian business number, AND
- transfers surplus assets of your gift fund to another deductible gift recipient (DGR) fund, authority or institution (you should check your rules to make sure you are complying with the provisions relating to winding up).
For more information, see:
2. Can we end some parts of our organisation, and not others?
Winding up and cancelation/deregistration is only necessary where you want to bring the entire organisation to an end. If you only wish to bring parts of your organisation to an end, how that is done will depend on what form of organisational structure has been chosen for those parts. For example, if those parts are just a division of the organisation but have no separate legal existence, then there are no special rules that affect how you bring that division to an end. You may need to re-deploy staff or make them redundant, sell assets, terminate leases etc and while each of those steps will need to be carefully considered, they do not affect the existence of the organisation.
However, if the part of the business or organisation is a separate legal entity (for example a subsidiary that is itself a company limited by guarantee or a ‘Pty' or ‘proprietary' company or a peak body that is an incorporated association) then, with one exception, the same rules apply as are discussed for companies limited by guarantee or incorporated associations.
The exception is that if the part of the organisation is a ‘Pty' or ‘proprietary' company and a decision is made to end that part of the business by voluntarily winding up, the person chosen as liquidator is not required to be a registered liquidator, and can be (for example) a director or the secretary of the organisation. But it is important to note that the responsibilities of a liquidator can be onerous and you should carefully consider whether it is better to appoint a qualified professional, or at least ensure that the person appointed has access to professional advice about their role and responsibilities.
3. How do people know our organisation has ended?
A number of the steps involved in cancelation or deregistration and winding up involve lodging documents with CAV (which are then notified in the Victorian Government Gazette and a State-wide newspaper) or ASIC (which are then put on the ASIC website) or notices in the Commonwealth Government Gazette. Anyone conducting a company search of ASIC or reviewing the Gazette will be notified of those steps.
Also, in the case of winding up or voluntary administration, once the process has commenced, the organisation must include in all public documents (letters, cheques, reports etc) immediately after its name, the words “in liquidation” (for winding up) or “administrator appointed” (for a voluntary administration).
4. If we wind up, can we start up again later?
In theory, yes. A liquidator, creditor or member of an organisation that is being wound up can apply to the court for an order terminating the winding up. And a former liquidator or a “person aggrieved’ by deregistration of a company can apply to a court for it to be reinstated to the register.
However, in practice these applications are very difficult to make and a court will usually require compelling reasons before it will either terminate a winding up or reinstate an organisation. In many cases it may be easier to start a new organisation than revive one is being wound up or has ceased to exist.
ASIC or CAV also have power to reinstate the registration of an organisation if it is satisfied that it should not have been deregistered (such where there has been some administrative error).