The liquidation of company in Singapore can happen in case the owner of the company decides to close down the company or it happens by the order of the court. The process is not simple, better to go seek the advice of a professional liquidator in Singapore.
Reasons behind liquidation of company in Singapore:
- Company has ceased all business activities
- Oppression – shareholders dispute
- Breach of statutory provisions
- Management deadlock
- Company cannot pay debt and is insolvent
- Corporate of financial restructuring of the group to which the company belong
- The company acting outside its scope of activities.
- Minimise tax liabilities and maximise tax advantages for the group to which the company belong
The companies can cease the existence either by ‘striking off’ or by ‘winding off’. Obviously these two ways are totally different processes and should no be confused as the same.
Striking off:
ACRA of Accounting and Corporate Regulatory Authority has the right of striking off a company. The company can apply to ACRA to strike off their name off the Register pursuant to Section 344 of the Companies Act. The ACRA can approve same if they find that the company is fulfilling all the requisite criterias and has submitted all the required documents along with the application before to do so.
The ACRA will check all required the documents being submitted with the application for liquidation of company in Singapore. If they are satisfied with the documents, they will send a notice of striking off to the official address of the company. Initially they take about 7 days to check the documents. Another final notice will go after 4 months of the first notice. If anybody wants to object, they can do so within this period. The total process will take about 5 to 6 months to complete.
Winding off:
Two types of winding up are possible:
- Voluntary Winding up:
The members or the creditors can go for voluntary winding up.
The members or directors can do so if they believe that company will be able to pay its debts withing 12 months of commencement of winding up.
The creditors voluntary winding up can be opted, if the directors believe that due to the liabilities of the company, they cannot continue the business any more.
The company has to look for a professional liquidator in Singapore, they need to appoint a liquidator or provisional liquidator to put up the necessary notification required under Companies Act and to wind up its affairs.
- Compulsory Winding up:
This will be done by the order of court, when the court is of the opinion that it is otherwise just and equitable that company is being liquidated. The court may appoint a liquidator to wind up the affairs of the company.
Liquidation process is not very simple and needs a lot of paper work and thorough knowledge of the process. So, it is always advisable to seek the professional help in case you are looking for liquidation of company in Singapore.