When ending a business with employees you have certain obligations towards your staff depending on whether you are covered by the federal or state labour relations laws. The state laws cover sole traders and partnerships and the federal laws cover proprietary limited companies.

Before closing your business talk to your lawyer and accountant about how you should proceed. In general, permanent employees will be owed entitlements when the company closes and their employment ends. These entitlements could include accrued annual or long-service leave.

If you are closing a company

Talk to the Fair Work Ombudsman to determine your employees' entitlements.

If you are closing a partnership or sole tradership

Talk to the Department of Commerce. Your employee obligations can vary depending on the type of agreement you have with them.

Notifying employees

You will also be required to notify your staff about termination of their employment or provide them with payment in lieu of notice. The notice period or payment in lieu is determined by the age of the employee and the amount of time they have worked for you on a continuous basis.

To find out more visit these websites:

• Department of Commerce: Labour Relations
• Fair Work Ombudsman

What's next...

• How do I close a sole trader ?
• How do I close a partnership?
• What are my tax obligations when I close my business?