If you own a company in Singapore, you might be aware of several regulations that must be followed by every business owner in the area. In a similar manner, there are few specific guidelines on company liquidation Singapore.
There are generally two possible ways to close a Singapore company: You can either choose to wind up or strike off. Striking off is a widely accepted solution for dormant or small companies. Moreover, this method is a quicker, simpler, and cheaper way to closure. However, it is important to mention that companies can apply for striking off only when they are not involved in any insolvency, arrangement, or compromise with other creditors or members. On the other side, winding up is generally a lengthy procedure that involves company liquidation, ceasing operations, realizing assets, paying off debts, and distributing surplus assets as per the existing financial status of the company.
The article below will provide you details about the necessary steps that one needs to take for company liquidation Singapore.
Steps to close Singapore company
- First of all, the majority of directors need to sign the Solvency Declaration.
- Organize an Extraordinary General Meeting within five weeks where all members can approve the compensation and appoint liquidators.
- It is important to pass a resolution during EGM to ensure the fast windup of the company while receiving professional liquidator’s assistance.
- It is important to meet publicity and solvency requirements to close Singapore company.
- File resolution within seven days at Accounting and Corporate Regulatory Authority. The details must be advertised in the Singapore newspaper in official languages within ten days.
- Notify Singapore’s Inland Revenue Authority for tax clearance by providing details about the final management account and tax composition details.
- Decide the date for the final meeting and publish an advertisement regarding tax clearance received from IRAS.
During this final meeting, the company members will be guided by the liquidator regarding the winding up process and asset deposition details. The liquidator is required to submit the return within seven days to the Accounting and Corporate Regulatory Authority. The company will be finally dissolved just within three months after the submission of the return. The court may declare dissolution of the company within two years after the dissolution date.
The procedure for striking off the company is usually different in Singapore. A solvent company that is not leading any operation in the market anymore can apply for strike off instead of winding up because the process is quicker and easier as well. However, in order to proceed ahead with this method to close Singapore company, it is important to meet the following criteria:
- The company must have ceased trading and other operations.
- There should not be any outstanding debts towards any government agency.
- No outstanding charges must appear in the charge register of the company.
- The company should not be involved in any legal proceedings.
- It should not be involved in any disciplinary proceedings or pending regulatory action.
- There should be no existing liabilities and assets in the name of the company.
Once these criteria are met, the company directors can file the online application to strike off the company.