Closing an NZ Company: Removal vs Liquidation Explained
Not all companies survive. If you are closing your NZ company, you need to choose the right route: removal from the register (simple, solvent) or liquidation (insolvent or complex).
Two Ways to Close an NZ Company
Closing a New Zealand limited company is more involved than simply stopping trading. The Companies Act provides two routes, and choosing the wrong one can leave directors personally exposed.
Option 1: Removal from the Register
Removal (also called "striking off" or "deregistration") is the simpler route and is available when:
- The company has stopped trading and has no outstanding debts
- All tax obligations are settled (GST, PAYE, income tax)
- All assets have been distributed or transferred
- All directors and shareholders agree
A director or shareholder applies to the Registrar of Companies. The Registrar gives notice, and if no objections are received, removes the company from the register after 20 working days.
Cost: NZ$45 filing fee. Timeline: approximately 3-4 months.
Option 2: Liquidation
Liquidation is required when the company is insolvent (cannot pay its debts), when creditors are involved, or when a court order requires it. A licensed insolvency practitioner is appointed as liquidator. They:
- Assess the company assets and liabilities
- Call creditors meetings
- Realise assets and pay creditors in the statutory order
- Investigate director conduct if the company traded while insolvent
- File a final report with the Registrar
Note: If you continue trading while knowing the company is insolvent, you risk personal liability as a director. Get advice from an insolvency lawyer or accountant immediately.
Before You Close: Check Your Obligations
- File all outstanding GST returns and pay any balance owed
- Cancel your GST registration with IRD
- Process all final payroll runs and cancel PAYE
- Cancel your employer KiwiSaver obligations
- Arrange final accounts from your accountant
An accountant or commercial lawyer can manage the removal process for you and ensure all obligations are cleared. Find a local accountant who handles company closures.