There are steps you will need to take if you change your business. For example, when you:
- change the composition of your business partnership because your previous partner retired or passed away or a new partner is admitted
- change your entity type because you have restructured your business
- incorporate your business.
Demergers
A demerger is a form of restructure. In a demerger, investors in the head entity (for example, shareholders or unit holders) gain direct ownership in an entity that they formerly owned indirectly (the 'demerged entity'). The underlying ownership of the companies or trusts that formed part of the group does not change. The company or trust that no longer owns the entity is known as the 'demerging entity'.
Under the demerger provisions you may not be eligible for tax relief if either the:
- demerger is not undertaken for substantive business reasons
- capital and profit elements of the demerger allocation do not reflect the circumstances of the demerger.
Practice Statement Law Administration PS LA 2005/21 Application of section 45B of the Income Tax Assessment Act 1936 to demergers provides administrative and technical guidance on applying the elements of section 45B. To provide certainty to your situation we recommend you seek a private ruling or class ruling.
Sole trader
If you are a sole trader and you are closing one business to start another, also as a sole trader, then you do not need to cancel your ABN. You must notify us of changes to your details, including your business type or ANZSIC on the Australian Business Register (ABR) within 28 days.
You may need to cancel registrations such as GST, LCT or fuel tax credits if they are no longer applicable to your business.
If you do cancel your ABN and later commence a new business as a sole trader, you can reapply online, and we'll register you with the same ABN.
Companies
If the company will not lodge tax returns in future years, print 'FINAL' in the box at this item on the company tax return.
If you are a subsidiary member of a consolidated group, do not print 'FINAL' if membership of the consolidated group is the only basis on which the company will not be required to lodge future tax returns.
A change of directors or shareholders is not a change of entity.
Once a company is deregistered with the Australian Securities & Investments Commission (ASIC), it ceases to exist and can no longer lodge forms with us. Any forms lodged in respect of a deregistered company will be cancelled and not processed.
We cannot discuss protected information relating to a deregistered company, including with people formerly authorised to act on behalf of that company.
Partnerships
If your partnership has stopped trading and the assets have been distributed during the year, answer 'YES' at the label stating 'Final tax return' on page 1 of the partnership tax return.
For more information, see Changing the makeup of a partnership.
Trusts
If you wound up the trust during the year and you have distributed all the trust's assets, print 'FINAL' at the label 'Final tax return' on page 2 of the trust tax return.
Show any proceeds you received from the sale of your business in your individual tax return.
Find out the information you need to change your business structure.