A Guide to Striking Off a Company in Singapore

In Singapore, there are two ways for business owners to close their companies; by striking off their company names from the Registrar or winding up their businesses. In general, striking off is the faster way, a simpler process with fewer costs involved. However, in either case, there are specific requirements these business owners have to meet to properly cease their business operations in the country. 

Closing a business by striking off a company

To strike off your company’s name from the register, your company’s director or secretary may apply to the Accounting and Corporate Regulatory Authority  (ACRA). To qualify for the striking-off application, your company must have paid all its liabilities, such as taxes and debts.

Furthermore, your company must liquidate all of its local branches if the headquarter will be closed down. But, before ACRA approves the application, your company must satisfy all the following criteria:

• Your company has not started business since the date of establishment (i.e., No business transactions have occurred since incorporation);
• Your company has no assets and liabilities;
• Company assets and liabilities must have been disposed of;
• Your company’s directors must have obtained written approval from the majority of shareholders;
• Your company must have submitted the last set of audited accounts (for public companies limited by guarantee);
• Your company must have submitted the last unaudited balance sheet (for all other companies);
• No tax liability is owed with the Inland Revenue Authority of Singapore (IRAS) – IRAS will not issue a tax clearance for the purpose of filing a strike (Latest Statement of Accounts);
• No unresolved tax issues and tax issues with IRAS (Last Notice of Assessment);
• No outstanding Central Provident Fund (CPF) contributions for employees;
• Your GST registration has been canceled, and there are no unresolved GST issues;
• No outstanding debt (creditors will file claims against your business for outstanding debts – the onus is on your business to examine these claims);
• No unpaid fees to registers or litigation; and
• Your company is not involved in any legal process and has no outstanding penalties (inside or outside Singapore).

Additional criteria for foreign companies applying to strike off their businesses with ACRA:

• The sole authorized representative cannot resign because the company has not appointed a successor.
• The authorized representative has not received instructions from the company for at least 12 months after the request was made regarding whether the foreign company intends to continue its operations in Singapore.
• The foreign company does not have an authorized representative (can be filed only by a registered filing agent).

If your company has met all the above criteria, your company’s director or secretary may submit an online application via BizFile+ using SingPass or CorpPass to strike off the company. There will be no filing fees for this transaction.

How long will the entire process take?

The whole process of striking off a company in Singapore will take at least 3-4 months, even if there are no objections from government bodies and the public. This 3-4 month waiting period is to await ACRA’s striking off gazette publication, indicating that the registrar has suspended your Singapore company.

What will happen after approval?

Once the application is approved, ACRA may notify your company’s registered office and its officers. Then, after 30 days, ACRA will announce the name in the Government Gazette (known as the First Gazette Notification). Finally, after another 60 days, the Registrar will republish your company name in Government Gazette (known as the Final Gazette Notification) and remove your company from the list. Overall, the whole process may take at least four months.

Can I file an objection against striking off?

Any interested party from your company may object to the striking-off application. Again, there is no fee to be paid for this transaction. If ACRA accepts an objection, they will inform your company of the objection. 

Next, your company will be given two months to resolve the issue. If it cannot resolve this issue within the given period, ACRA will terminate the application. In other words, your company can only submit a new application after the objection has been resolved.

You may also want to read this related article:

All You Need to Know About Dormant Companies in Singapore

Closing a business by winding up a company

Winding up – also known as liquidation – of your company is another option you can choose to close your business. It is a formal process by which your company’s assets are converted into cash, which is then used to pay off the debts and liabilities of the company.

The winding-up process involves dividing the remaining assets/surplus of the company among your creditors and shareholders. Once this process is complete, it ends the existence of the company. 

Some of the reasons why business owners choose to wind up their companies include:

• Giving up their business activities;
• Not making enough profit to continue the business;
• Disputes among shareholders; or
• The company or its officers (persons employed in an executive capacity) have violated their legal obligations.

There are three main ways you can wind up your company:

1. Members’ Voluntary Winding Up

You may decide to wind up your company’s affairs voluntarily if the company can pay its debts in full within 12 months after the commencement of dissolution. In addition, your company’s directors are required to file a solvency statement. Also, note that if the company goes bankrupt, it must wind up through voluntary closure of creditors.

Once you have decided to choose the members’ voluntary winding-up process, you must take the following steps:

• Have the majority of your directors signing the Declaration of Solvency (with an attached statement of affairs);
• Convene an Extraordinary general meeting of members (EGM) within five weeks to adopt resolutions to wind up the company, appoint a liquidator and approve their remuneration;
• Pass a special decision for the dissolution of the company and receive assistance from a professional liquidator (held during the EGM);
• Meet the required solvency and publicity requirements
• Once a resolution is passed, it must be submitted to ACRA within seven days and advertised in Singapore newspapers within ten days (one for each official language: ​​English, Chinese, Tamil, and Malay).
• Notify IRAS for tax clearance (i.e., by submitting a final set of management accounts and a final set of tax calculations up to the date of business termination).
• Once the tax clearance is received from IRAS, the date of the last meeting will be decided, and the final advertisement will be published accordingly.

What is next after the members’ voluntary winding-up process?

After dealing with all your company’s affairs, you must create an account that shows how you have conducted the winding-up process and how you have liquidated your company’s assets. Also, after you have done all the above steps, you will need to hold a final meeting to explain the account to the people present.

According to the Companies Act, you (or your company’s liquidator) must lodge a return to ACRA and the Official Receiver showing that the meeting was held with a copy of the attached account within seven days of the meeting being held. Then, three months after the return has been lodged, your company will finally be ceased.

2. Creditors’ Voluntary Winding Up

If your company goes insolvent or cannot meet its obligations, you may hold a meeting with your company’s creditors to consider voluntary dissolution of the company. If the resolution supports the dissolution, you will need to appoint a liquidator (provisional liquidator) to wind up your company’s affairs.

However, note that it is your company that has to apply for winding up, not the creditors. They are only responsible for:

• giving a vote whether the company should be closed or not;
• choosing who will be appointed as liquidator; and
• conducting a creditors’ meeting.

Notice of the creditors’ meeting must be advertised in at least one English language daily newspaper at least a week before the meeting date. Also, note that if you are a company director, you should be able to come up with these essentials to put before the meeting:

• A complete statement of the company’s affairs showing the methods and means by which you arrived at the valuation of company assets; and
• List of creditors and their estimated bill amount to be submitted before the meeting.

3. Compulsory Winding Up

Unlike the other two processes that require directors to file for closure, the compulsory winding-up process allows other parties to apply to the court for your company to be liquidated. This means your company’s directors, creditors, liquidator, or judicial manager may present a compulsory winding-up application to the court.

For your information, insolvency is not the only reason why a company may have to be wound up through the court process. Courts may order the dissolution of a company in certain situations, such as where:

• The company has no members;
• The company has not started a business within one year of its establishment;
• Directors have acted in the affairs of the company in their own interests rather than the interests of the members as a whole;
• The court believes that the dissolution of the company is fair and reasonable; or
• The company has carried out multi-level marketing activities or illegal pyramid sales.

Striking off a company is not the end of everything. You can always start afresh by setting up a new business in Singapore. However, closing down a company can be an overwhelming process. Therefore, we are here to assist you in the entire process. 

Feel free to contact us for a practical guide or if you have any further questions you would like us to help with.

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