A company in Singapore can be closed on a voluntary basis either on the order of the court or on the decision of its owners. The process of liquidation of a company is widely named Winding Up or Striking Off and both these operations lead to the ceasing of company operations. However, these processes are very different from each other and cannot be used interchangeably. Moreover, the Singapore government has recently made some changes to the liquidation of company in Singapore. The business owners now need to follow the updated rules and regulations to proceed ahead with the company liquidation process Singapore.
The private company that has stopped its trading activities can apply to get struck off from the register at the Company Registrar’s office. In most cases, the striking-off process is faster, easier, and less costly; but it is suitable for dormant or small companies that can meet specific requirements. It is not possible to struck-off a company that is subjected to some insolvency proceedings or arrangement or compromise with creditors or members.
On the other side, winding up is better recognized as a more formal liquidation process that involves orderly closure of company affairs. It is necessary to appoint a liquidator to handle the process while realizing assets of the company, payments of the debts, ceasing the sale operations, and distribution of surplus assets. In order to know more about these procedures, you can go through the details below.
Liquidation of Company in Singapore – Striking off a Company
The first most commonly used liquidation process is striking off a company and for this, the company needs to apply to ACRA. The application must be submitted according to Section 344 to the Registrar and they will approve the liquidation if some reasonable cause is provided. The main requirements for this liquidation process Singapore are:
- Company operations must be ceased.
- The company should not be involved in any kind of court proceedings overseas or within the country.
- The company does need not have liabilities and assets while submitting an application.
- The company should not have any pending tax liabilities with IRAS.
- The company should not have debts associated with government departments in the country.
- Director particulars must be the same as that of ACRA records.
- All shareholders need to give their consent for striking off a company.
Liquidation of Company in Singapore – Winding up a Company
There are generally two paths for winding up Singapore Company: compulsory winding or voluntary winding. The company can decide to wind up all trades and affairs voluntarily, only if the directors feel that they can pay off all the debts within 12 months of winding up. The directors need to make a written solvency declaration in a meeting and then the documents can be submitted to the registrar. The directors of the company need to find a liquidator that can handle the winding-up process while managing debt payments to different parties. On the other side, compulsory winding up requires an order from the court, and all the proceedings regarding the liquidation of company in Singapore are handled by the liquidator appointed by the court only.