It is possible to close a company by following two different procedures: Winding up and striking off. Both these procedures help to cease the company operations; however, the procedures and preferences may vary.
Generally, striking off is a very straightforward process; however, Winding Up or liquidation can have three different categories: Court Winding Up, Creditors’ Voluntary Liquidation, and Member’s Voluntary Liquidation. When a company is in the liquidation process, the entire control is transferred to the liquidator.
There can be several reasons behind the company liquidation Singapore. A few of these are mentioned below:
- The company has already ceased all business operations.
- There is a management deadlock.
- Oppression as per the shareholders dispute section 216.
- Financial or corporate restructuring of the company owning group.
- Maximizing tax advantages or minimizing tax liabilities for the group.
- Statutory provision’s breach along with the committed offenses.
- Company activities reported being outside its scope.
When the winding-up process is executed by members of the company, they can appoint the liquidator as well. This procedure is followed when a company can pay all its debts just within 12 months of winding up. In the creditors’ voluntary winding-up procedure, creditors have the choice to select a liquidator. This procedure is valid when the company is not in a position to meet a desired range of liabilities. In the case of compulsory winding-up procedure, the winding-up application is presented in front of the High Court. The court takes complete responsibility for appointing a liquidator or official receiver to handle the process.
Things to know about licensed Singapore liquidators:
The liquidator’s powers during the compulsory winding-up process are already set in Section 144 defined under Insolvency, Restructuring and Dissolution Act 2018. The role of the liquidator involves investigation of the assets and affairs of the company, claims of the third parties and creditors, and conduct of the officers. The liquidator is also responsible for realizing and recovering the assets of the company in some profitable manner. The professional also adjudicates claims of creditors to ensure adequate distribution of assets.
The assets of the company that can be realized by the licensed Singapore liquidator generally include money in hand and in banks as well, debts disclosed within the statement of affairs, sale of properties owned by the company, including office fittings, unpaid capital, and recovery of assets using any kind of dispositions made by the company. The liquidator can be selected by the company directors, or when the process is being handled by the court, the judge can also select liquidators. These experienced professionals know the process behind company winding up and striking as well. They can guide company owners regarding the entire process while making it easier to handle assets and liabilities.
The liquidators in the country need to qualify set criteria for approval. They need to present evidence of experience as well as the capacity to lead a case. There are many reputed universities and institutions that provide a degree in the field of accountancy. Liquidators need to pass the examination to become a part of the committee for company liquidation Singapore.