If you have received a notice from the Australian Securities and Investments Commission (“ASIC”) relating to the pending deregistration (“Strike-Off”) of your company it is important to act sooner rather than later.

What is ASIC Strike-Off Action?

ASIC may begin “striking off” a company from the official list if it thinks the company has ceased trading or it has overdue fees and penalties.

Why has ASIC Initiated Strike-Off Action?

There are a few reasons why ASIC may begin deregistering a company, including if:

  1. the company has not paid its annual review fee within 12 months of the due date;
  2. the company has not responded to a company compliance notice, has not lodged; any documents in 18 months, and ASIC believe the Company is not in business; or
  3. the company is being wound up and there is no liquidator appointed.

Is ASIC Initiated Strike-Off Action a Problem?

In short, yes! The process can be problematic for directors as it initiates the forced closure of a business without consideration of the following factors:

1). The trading status of the business.

Strike-Off action may result in customers and suppliers not wanting to conduct business with the entity in question due to concerns surrounding the solvency/trading status of the business;

2). The assets of the business vest in ASIC upon deregistration.

This can be very serious in circumstances where the company owns significant assets such as real property or plant and equipment. As it will likely result in significant legal fees being incurred attempting to reinstate the company;

3). Legal proceedings are stayed

The company no longer exists upon deregistration. If that the company was party to legal proceedings they can no longer continue. This may result in judgements/costs being awarded against the business/the Directors personally if party to the proceedings.

How can I stop an ASIC Initiated deregistration?

Depending on why the company is being deregistered, you may be able to stop deregistration by:

  • paying the company’s annual review fee and any other outstanding fees
  • lodging any required documents, or
  • writing to ASIC and advising that the company is still trading.

Where can I get Help?

If you have received a letter from ASIC relating to striking off a company and need expert advice, contact the team at MaC Insolvency we are here to help with over 40 years of experience in dealing with corporate restructuring and insolvency for struggling businesses.

Contact us now on (02) 8002 9580 for a free consultation.