Introduction to Company Striking Off Singapore
Businesses change over time and there might be a time when running a company isn’t needed anymore. In such cases, striking off a Singapore Company is a good way to formally close a business and remove it from the Accounting and Corporate Regulatory Authority (ACRA) register.
A company strike-off is a relatively simple process for companies that have ceased trading and have no liabilities. Striking off can be a quicker, cheaper and less bureaucratic alternative to keeping a dormant company or a formal liquidation.
This guide explains the requirements, process, timeline and important things to consider when Striking Off a Local Company in Singapore.
Striking Off vs Winding Up?
Many business owners confuse striking off with winding up, but they are two processes for different purposes.
Companies that are suitable for striking off are:
Cease operation.
Have no debt or owe anyone.
No assets remaining.
No pending litigation.
This is usually an easier, quicker and less expensive process.
Winding Up
Winding up (also called liquidation) is a formal legal process in which:
- Company assets sold out.
- Creditors are paid.
- The remainder is distributed to shareholders.
This option is generally required if the business has property, debts or claims from creditors to settle.
Striking off a Singapore company – Eligibility criteria
Before applying for strike-off, a company must meet some eligibility criteria.
Liabilities No Outstanding
The company should have paid all its debts, loans and other financial obligations in full.
No legal proceedings are pending.
The company should not have any pending lawsuits, court cases or regulatory probes.
No Left Assets And Liabilities
All assets should be disposed of and there should be no liabilities on the company’s books.
Shareholder and Director Approval
Directors and shareholders have to agree to the decision to strike off the company.
Key Requirements Prior to Application of Striking Off
Good preparation is important to ensure a smooth strike-off process.
Shut down corporate bank accounts
All corporate bank accounts must be closed before application.
Settle up on outstanding debts and taxes
Make sure that all supplier invoices, employee pay, taxes and other liabilities are paid.
Deregister for GST
If the company is registered under GST, it should go through the GST deregistration process prior to applying for the strike-off.
Final Accounts Prepare
Keep adequate accounting records and prepare final accounts where needed.
How to Dissolve a Local Company in Singapore: Step-by-Step Guide
Step 1: Checking the Company’s Status
Please confirm that the company is no longer trading and satisfies the criteria for strike-off.
STEP 2: Pay Old Debt
Est pay off all debts, taxes, CPF contributions and other outstanding obligations.
Step 3: Get Shareholder Approval
Obtain shareholder approval and ensure no objections to the strike-off application.
Step 4: File Strike-Off Application to ACRA
An ACRA authorised filing agent, company secretary or a director may submit the strike-off application on ACRA.
Step 5: ACRA Review and Notification Process
ACRA will review the application and consult the relevant government agencies, including IRAS, to ascertain that there are no objections.
Step 6: Final Gazette Publication And Company Closure
If there are no objections, ACRA will publish the name of the company in the Government Gazette and eventually strike it off the register.
Timeline for Striking Off Singapore Company
The timeline for Striking Off Singapore Company typically takes around 4 to 6 months. After the application is submitted, ACRA reviews the company and publishes a Gazette notification. If no objections are received during the review period, the company will be officially struck off and dissolved.
What is the length of the process?
Usually it takes about 4 to 6 months for the whole process, depending on the circumstances of the company and whether there are any objections.
First Gazette Notification
Once the application is accepted, ACRA will publish the name of the company in the Gazette.
Objections Waiting Period
Creditors and government agencies are given time to object to the strike-off. Affected parties.
Final Gazette Notice
Where there are no objections, the company is wound up and a final Gazette notification is issued.
Common Reasons for ACRA Rejection of Strike Off Applications
Understanding the main reasons for rejection can help you avoid delays.
Tax due
Approval may be affected by outstanding tax liabilities with IRAS.
Nature of Business Activities
As a rule, the company is not eligible if the business operations are continuing.
Excellent CPF Contributions
All outstanding CPF dues must be cleared before applying.
Legal Action
If a company is involved in ongoing legal proceedings, it may be rejected.
Common problems during the strike-off process
Missing records
Your accounting or corporate records are incomplete and may delay your application.
Liabilities not yet paid
Rejection is often the result of outstanding financial obligations.
Disputes among shareholders
Shareholder disagreements can complicate the process.
Regulatory Adherence
Delays may occur if you do not meet the requirements of ACRA or IRAS.
Do you need to contract a corporate service provider?
Some business owners do this process on their own, but you can also find help from professionals to make the process easier.
Benefits of Getting Professional Help
- Ensures regulatory requirements are met.
- Reduces the chance of application denial.
- Saves time and administrative work.
- Expertly guides you through the process.
How Specialists Can Make It Easy
Corporate service providers can check eligibility, prepare documentation, liaise with government agencies and do the filings for you.
Frequently asked questions
Is it possible to save a company?
“Yes.” In certain situations, a company may seek restoration subject to regulatory approval.
How much does it cost to strike off a company in Singapore?
Costs will vary based on whether you use professional services and if there is extra work to be done to be compliant before you file.
Can a company with debts be wound up?
Generally not. No application for strike-off can be approved until all debts and liabilities have been settled.
What happens to company records after strike off?
Post-dissolution, the company records should be maintained as per the regulatory requirements of Singapore.
Conclusion
Winding up a Singapore company is an efficient solution for companies that have ceased operations and meet the ACRA’s eligibility criteria. Companies that clear all debts, taxes and other compliance duties beforehand are able to complete the strike-off process efficiently and avoid unnecessary delays.
Whether you are contemplating Striking Off a Local Company to cut down on compliance costs or officially closing down an inactive business, it is essential to plan properly and follow the rules. Getting professional help can make things easier and increase your chances of success.