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Business owners may choose to close their company for a myriad of reasons, such as to move onto different ventures or due to financial difficulty. In Singapore, the process to legally close a company is known as ‘striking off.’ Before deciding to dissolve your company, it is essential to understand the steps and prerequisites involved. In this blog, we will guide you through the requirements and procedure to strike off your company in Singapore.
Understanding Striking Off
The term ‘strike off’ refers to the removal of a company from the Register of Companies, effectively bringing its existence to an end. Striking off a company requires it to fulfil several criteria to ensure that the process is completed responsibly and without leaving any pending obligations.
Eligibility Criteria for Striking Off
Before commencing the striking off process, you should verify if your company is eligible for it. According to the Accounting and Corporate Regulatory Authority (ACRA) of Singapore, the following conditions must be met:
- The company must have ceased trading or not commenced business from the outset.
- The company must not have any outstanding tax liabilities with the Inland Revenue Authority of Singapore (IRAS) and should not be indebted to any other government agency.
- The company should have no outstanding charges in the company’s register of charges.
- The company should not be involved in any legal proceedings within or outside Singapore.
- The company has disposed of all trading assets and liabilities.
These are general criteria, and more specific ones may apply depending on the unique situation of your company.
Procedure to Strike Off Your Company in Singapore
Once the eligibility criteria are met, the company can proceed with the striking off application. Here is a step-by-step guide to facilitate the process:
Step 1: Board Resolution
A Board Resolution must be passed agreeing to the striking off. This decision should reflect the consensus of all directors. In cases where the company has shareholders, their agreement should also be secured.
Step 2: Clear All Liabilities and Obligations
Ensure the company has no outstanding debts or liabilities. This includes tax liabilities, employee salaries, and outstanding invoices. Also, the company needs to deregister from the Goods and Services Tax (GST), if applicable.
Step 3: Application to ACRA
Next, an application to ACRA for striking off is submitted. ACRA will then send a striking off letter to the company’s registered office address, to the directors at their residential addresses, and to IRAS.
Step 4: Objection Period
There is a 30-day period for any interested party to raise objections to the striking off. If no objections are raised, ACRA will publish the name of the company in the Government Gazette.
Step 5: Final Gazette Notification
After another 60 days, if no objections are received, ACRA will publish a final notification in the Government Gazette declaring the company has been struck off.
This procedure takes approximately four months, assuming there are no objections. However, the timeframe can vary depending on the specific circumstances.
Seeking Professional Help
It’s important to note that striking off a company is a complex process, and you may need legal or professional advice. Professionals such as certified public accountants or corporate secretaries can help ensure the process goes smoothly and all legal requirements are met.
Remember, striking off your company in Singapore is a significant decision with serious legal and financial implications. Ensure you meet all criteria and follow all steps carefully to avoid potential issues down the line.
