Liquidation or winding up is the process in Singapore, where the company’s debts and liabilities are paid off by seizing the assets of the company. If is any surplus then that is distributed among the that will be distributed among the contributors of the company according to their rights and interests and if not so then it will be dealt as per the constitution of the company.
The winding process are of various types. It can be voluntary or involuntary. Let us take a look at the type of voluntary winding up of a company in Singapore:
The types of voluntary winding up Singapore:
Voluntary Winding up by the members
When the resolution will be passed, the liquidation process also starts. The company will have to pay its debts withing 12 months after the commencement of winding up.
After the declaration of Solvency, a statement of affairs following the Form VWU-9 (can get in the Ministry of Laws website) which will show the latest values of the followings:
- The total amount expected to be realized from the existing assets of the company.
- Total liabilities of the company
- The estimated cost of winding up.
Within five weeks of filing the declaration of Solvency, the company must conduct an extraordinary general meeting (EGM) to pass the resolution about declaration of company’s winding up.
After the declaration, the company has to
- lodge a resolution copy with ACRA within 7 days from the date of resolution
- Put the resolution notice to local English daily newspaper and in the Gazette.
- Appoint a liquidator to wind up the company’s affair.
Please remember that once the liquidator is appointed, the director will lose their powers.
Creditor’s voluntary winding up (approved liquidator Singapore)
If the company is not able to pay meet its liabilities, then in Singapore, it can have a meeting with its creditors and can propose for a voluntary winding up Singapore and after the approval of the creditors can look for an approved liquidator Singapore, to help the company in the process of winding up.
Once the approval comes from the creditors, the company’s directors must lodge a statutory declaration with the Official receiver and also prepare the statement as per VWU-1 to be lodged with ACRA. This statement should state:
- The company is winding up due to liabilities
- The creditors meeting will be held within 30 days of the date of declaration.
In both the above cases, the company need to appoint an approved liquidator who should possess the followings:
- Evidence of experience
- Evidence of capacity
- Applicant must have passed the final exam of accountancy from the approved institutions by the Singapore government.
Hope the above guidelines will help you, if you are planning for your company’s winding up in Singapore.