Singapore is one of the most attractive places for foreign investors to start a new company. However, not all business owners succeed with their goals in the Singapore business hub. In some critical consequences, they need to proceed ahead with the termination of company operations. This is better known as company liquidation and can be executed in two ways: compulsory or voluntarily.
Company Liquidation Singapore may appear a complex procedure to beginners. But if you hire a licensed insolvency practitioner to handle this process, it can be executed with ease.
Company liquidation Singapore procedure:
Singapore companies can be liquidated voluntarily or via court decision. As per the Singapore Companies Law, the insolvency filing can be done by the directors of the company. This application must be submitted when the company finds no other way out to repay standing debts in the near or long future. Some of the most common reasons behind company insolvency are the inability to pay off debts, unprofitable business undertakings, and disputes between shareholders. The company liquidation in Singapore can be done through winding up or striking off.
For compulsory liquidation, the members of the company need to draft a declaration in a special meeting. This declaration must be submitted to ACRA, and then the notification will be sent to all board members. On the other side, the voluntary company liquidation can be initiated by creditors when the directors are not able to pay off the debts or company operations cannot be continued. You can hire an experienced and licensed insolvency practitioner to handle the entire procedure for company liquidation.
Legislation on Singapore company liquidation
While considering company liquidation procedures in Singapore, the involved professionals need to consider some essential legal frameworks. If Singapore company members are interested in applying for voluntary liquidation, they need to follow Section 290(1) (b) of the Companies Act. Furthermore, if creditors are requesting liquidation of a company in Singapore, they need to follow Sections 298, 297, and 296 of the Companies Act.
Other than this, the compulsory winding-up process in Singapore comes under Sections 255 (2), 254, and 253 of the Companies Act. For Striking off the company in Singapore, you need to consider regulations mentioned in Section 344.
Shareholders can make the decision for company liquidation if it is able to pay off all debts within 12 months of the beginning of the winding-up procedure. In this stage, the directors will write a solvency declaration and file the application with the Trade Register of Singapore. An extraordinary General Meeting must be organized within five weeks from submission of this declaration, and then the appointment of liquidator must be made. It is important to publish the declaration of solvency as well as the appointment of a liquidator in four daily newspapers.
The company liquidation Singapore expert can help you submit a special resolution to ACTA, and once the winding-up process is executed, he will also prepare a report regarding relevant operations as required. This report must be further presented to the company shareholders and will be filed via the Official Receiver.