COMPANY STRIKE OFF / CLOSE DOWN
Are you planning to cease your company’s operations in Singapore? If the answer is yes, then you are not alone. According to the statistics compiled by ACRA, 23,608 companies shuttered their doors in 2020. That means on average, 1,967 companies closed their business every month!
Many entrepreneurs shutter their business for a variety of reasons. Top of the lists are lost of major customers, cost of doing business is too high in Singapore, products and services not competitive in the market place etc. Of course, the Covid 19 pandemic just makes the business environment even tougher.
Closing the business involves a few steps. While you have made the painful decision, it is in your best interest to let professional firms like us handle the closing process.
There are two methods of closing a company. They are striking off and winding up. Striking off is suitable for company that is dormant and has no more outstanding liabilities or creditors. It basically means to de-register the company from the Register of Companies. As no liquidator is required, this process is both faster and cheaper. However, if the company is insolvent, it can only be wound up and not struck off. In winding up process, a liquidator has to be appointed. Hence the process is more tedious and costly.
WINDING UP A COMPANY
When a company is solvent, it can still be wound up. This involves the company applying for ‘Members’ Voluntary Winding Up’
On the other hand, when a company is insolvent, there are two ways in which they can be wound up:
Voluntarily applying to be wound up through a “creditors’ voluntary winding up”; or a “members’ voluntary winding up”;
Involuntarily wound up under an Order of the Court (“compulsory winding up”). This is normally applicable when a company is unable to repay its debt.
When a company is wound up, a liquidator will be appointed. His main duties are to wind up its affairs and file the necessary notifications required under the Companies Act/Insolvency, Restructuring and Dissolution Act.
CRITERIA TO STRIKE OFF A COMPANY
Before ACRA approves your application, the following conditions must be met:
The company has not commenced business since incorporation or has ceased trading.
The company has no outstanding debts owed to Inland Revenue Authority of Singapore (IRAS), Central Provident Fund (CPF) Board and any other government agency.
There are no outstanding charges in the charge register.
The company is not involved in any legal proceedings (within or outside Singapore).
The company has no existing assets and liabilities as at the date of application and no contingent asset and liabilities that may arise in the future.
The directors have the written consent of the majority of the shareholders.
Normally striking off a company is much easier and faster than winding up a business. The whole process will take approximately 6 months to complete.
Our preferential fees for striking off starts from $350/-