To close down a company in Singapore, it can be done by either i) strike off the company name from the Singapore companies registry; or ii) through liquidation of the company.
Both methods have their pros and cons but, in this article, we will focus on the strike off process.
Introduction
The strike off process is an easier and faster process to wind down a company in Singapore and is suitable for qualified or dormant Singapore companies. You can refer to the criteria section below for the qualifying conditions.
Strike off means removing the name of the company from the Accounting and Corporate Regulatory Authority (ACRA) registry. Once the ACRA approves the strike off, the company is considered to have being dissolved. However, please note that the company can still be restored within 6 years after the company name had been struck off through a court order.
Outstanding Liabilities
Further, striking off doesn’t mean clearing the company’s directors and members of liabilities if any remains. Under section 344H(7) of the Companies Act. It is stated that despite the company’s dissolution, the liabilities of all directors and shareholders of the company continue even after the company’s dissolution, and these liabilities are enforceable against them as if the company had never been dissolved.
Penalty
Also, take note that a director who has at least three of his companies struck off by ACRA within 5 years, will be disqualified from acting as director or take part in managing any other company for five years after the date which the third company is struck off.
Criteria to striking off a company in Singapore
Your company must satisfy the strike off criteria set by ACRA below in order to obtain approval for striking off. These criteria can serve as reasonable cause for ACRA to believe that the company is not operational, among others. Here are the requirements:
- The company has not commenced business since incorporation or has ceased trading.
- The company is not involved in any court proceedings within or outside Singapore.
- There are no outstanding charges in the charge register.
- The company has no outstanding tax liabilities with the Inland Revenue Authority of Singapore IRAS, no outstanding employers’ contributions owing to the Central Provident Fund Board (CPF), or any other debts with any other government agency.
- The directors have obtained the written consent of the majority of the shareholders and have authorised, you the applicant, to submit the application for striking on behalf of the company.
- The company is not subject to any ongoing or pending regulatory action or disciplinary proceedings.
- The company’s accounts have no existing assets and liabilities as of the date of application and no contingent assets and liabilities that may arise in the future.
- If there are assets and liabilities, the applicant must submit documentary evidence to show that the assets have been disposed of and that the liabilities have been settled or waived.
NovoPlus can help
In Novoplus, we are professionals with years of experience in dealing with corporate restructuring and reorganisation which includes handling the winding down of Singapore companies through the strike off process. Please feel free to contact us at finance@novopluscorp.com or reach out to us on Whatsapp using the button on the right of the website to find out more on how we can assist your business.
Last Updated on 24/06/2024 by Dennis Chew