A Singapore registered company can be deregistered or closed down either by Liquidation (also referred to as Winding Up) or Striking Off.
Liquidation (or Winding Up)
Liquidation or winding up can be effected either by a member’s voluntary winding up or a creditor’s winding up. The process of winding up essentially requires the appointment of a liquidator who is in charge of selling off the company’s assets and distributing any proceeds to creditors or contributories. Liquidation usually takes a substantial length of time and is often a costly proposition.
Striking Off is a quicker and more cost effective option for closing down a Singapore Company, provided that the Company is able to pay off all its liabilities and fulfill all criteria for striking off.
Before Striking Off, the following criteria must be satisfied:
- The company must have ceased trading or not commenced business from the date of incorporation.
- The company must not have any outstanding tax liabilities with IRAS (Inland Revenue Authority of Singapore).
- The company must not be indebted to any other government agency.
- The company must not have any outstanding charges in the company’s charge register.
- The company must not be involved in any court proceedings (within or outside Singapore).
- The director(s) must obtain the written consent of the majority of the shareholders.
- The company must not have any current/contingent assets and liabilities.
- The accounts attached must be drawn up till the date of cessation indicated in the application (if any).
- Company Limited by Guarantee must submit the last set of audited accounts.
Key steps when Striking Off a company
- Closing of bank accounts of the Company
- Preparation of “zerorised” set of final accounts
- Submission of tax clearance documents to IRAS
- Once tax clearance is obtained, filing of Striking Off application with ACRA
Upon submitting a Striking off application:
- ACRA processes the application normally within 5 working days.
- If the application is approved, ACRA sends a striking off notice to the company’s registered office address, its directors and company secretary and to IRAS.
- After expiry of 1 month from such striking off notice, if no objection is received, ACRA publishes the name of the company in the Government Gazette (First Gazette Notification)
- After expiry of 3 months from such First Gazette Notification, if there is no objection, the name of the company is be struck off the register by ACRA (Final Gazette Notification)
- If ACRA receives an objection to striking off before Final Gazette Notification, the company is given 2 months to get the objection cleared.
- If the objections are not cleared within the 2 month period, ACRA terminates the striking off process.
- The whole process of striking off takes approximately six months.
- During this period, the company secretarial retainer fee will continue to be charged
- A company which has been struck off can still be reinstated by ACRA within 15 years from the date of its striking off if an order from court is obtained to reinstate such company.