Closing down Company
The need for closing a company in Singapore can be brought about by many circumstances. It should be a fairly straightforward process, but one ma takes some time depending on its complexity. It varies from companies to companies. However, sometimes, the closing of the company may be unsuccessful for a few reasons. The reasons, condition/criteria and ways to close a company are being further elaborated below.
For ease of reading, the following acronyms are used;
- ACRA refers to Accounting and Corporate Regulatory Authority
- IRAS refers to Inland Revenue Authority of Singapore
- CPFB refers to Central Provident Fund Board
- EGM refers to Extraordinary General Meeting
- The Officers refer to the Director/s and Company Secretary
Reasons for closing a company in Singapore
Closing a company could be caused by the various reasons as listed below;
- Rising rental rates
- Rising operational costs and manpower costs
- Loss in business competitiveness resulting in low profits
- Wrong investments or Over Investing
- Business becoming irrelevant resulting in the inability to keep up with the Market Trend
- Unable to innovate and keep up with the digital era
- Economy crisis
- Disagreements / Disputes within the Management Team / Shareholders
- Poor or No Succession Plan affecting Continuity in Business
- Changes in main company structure (Foreign owned companies)
- Changes in the Singapore Company Act which may affect the business plans
- Company Re-structure / Re-branding
- Company is dormant and the owner decides not to want to incur further compliance and maintenance costs
- Better business opportunities in the neighboring countries such as Thailand, Malaysia and Vietnam
- Non-compliance or breach of statutory provisions
How to Close a Company by Striking Off?
In Pursuance to Section 344 of the Singapore Companies Act, a Company may apply to ACRA to strike its name off the Register. ACRA may approve the application if the Company shows that it is not carrying on business with the following criteria for striking off is met. ACRA may deny the application if the criteria of striking off is not met, or an application is made by the liquidator or any other interested person to object to the company’s closing down. As part of the closing down process, the Company must also inform ACRA,CPFB, IRAS and all other relevant licensing authorities where needed. If no objection is received by ACRA for striking off, then the Company will generally be struck off ACRA registrar within 6 months after lodgment with ACRA.
Criteria for striking off
- The particulars of the directors must be in accordance with the records of ACRA
- Trading in the Company have stopped or to present that there had been no trading since incorporation of the company
- No involvement in any court proceedings within or outside Singapore
- At point of application, the Company should have cleared all its assets and liabilities
- No outstanding penalties due to ACRA
- No outstanding tax liabilities with IRAS.
- Must not be indebted to other government departments
- No outstanding ACRA summonses against any of the Officers
- Consent to the striking off the Company has be agreed by all shareholders. A letter of consent from each individual shareholder must be obtained and presented.
Steps to Strike Off a Company
- Submit an application to ACRA. ACRA will then review and if submission is in order and if the Company has met the criteria of striking off. It generally takes about 7 working days for ACRA to process the application. Depending on the complexity of the case, it may take longer.
- With criterias met and submissions made to the satisfaction of ACRA, a “Striking Off Notice” will be sent to the registered office address of the Company, to its Officers at their residential addresses and the Singapore Tax Authorities etc.
- From the date of the striking off notice sent to the respective parties, it will take about another four (4) months and thereafter, a Final Notification will be made informing parties that if no objection is being received, then soon the Company will be struck off the Registrar.
Singapore professional firm can help close down your company
There is a lot that is involved in the winding up of a company in Singapore. Thus, it is best to hire a consultancy firm such as J Accounting Pte. Ltd. to help expedite the process. What such a firm is going to do is to remove guesswork from the picture and reduce the room for error.
The consulting filing agent firm registered with ACRA will look at all the company books, clean the account records and advice the directors on the way forward. This is important especially for foreign companies whose directors may not know how to close a company.
Business advisors do not only help foreigners to establish companies in Singapore. They also help them to close them down. With the help of professional accounting and secretarial firm, you can be amply advised to make the closing process as flawless as possible. Alternatively BizFile from ACRA also offers information about how to close a local or a foreign company. If you need help closing down the company, do get support from J Accounting who provides company strike off services.
