Boutique NSW-based software developer, KnowIT Pty Ltd, has gone into liquidation after being hit with a wind-up application.

The application was lodged by the Australian Tax Office in March following the company's non-payment of tax.

On June 23, a Federal Court registrar for the NSW district directed KnowIT to be wound up and liquidators, Steven Nichols, appointed.

KnowIT produces Web-based knowledge management software. Former owner and director, Michael Lacie, said its cash flow problem had been caused by a slower development cycle.

He claimed the ATO was its only creditor.

"In the past our developers had not acted professionally and the software was missing back-end components. It had to be redeveloped, with different modules reworked," Lacie said. "This meant our other projects were not completed on time.

"It's not a lot of money. We approached the Tax Office with a payment schedule, but the wind-up application continued."

As a result of the wind-up application, Lacie said he had sold the company to Newcastle-based software development house, KCM Systems, earlier this month.

Some of its staff had been let go, leaving six employees, he said.