There are two main ways by which a company in Singapore, can be closed down either by striking off or by liquidation / s winding off. The processes for voluntary winding up Singapore and the involuntary winding up of a company are very much different. One is done voluntarily by the members of the company and the other one is done by the order of the court. The Insolvency, Restructuring and Dissolution Act (IRDA) sets out the rules for liquidation of company in Singapore.
What is winding up of a company in Singapore?
The winding up can be done in both solvent and insolvent status.
The companies in solvent state can apply for winding up voluntarily by the members or creditors of the company.
The involuntary winding(compulsory winding up)up is done by the order of the court based on the application by a creditor.
Reasons behind a solvent company would want to wind up:
There can be several reasons behind a company’s voluntary winding up while still it is in solvent state. They can be as follows:
- The company is no longer making any profit
- The company has ceased its business activities
- There is restructuring of the corporate or financial group to which the company belongs
- There are lot of disputes among the shareholders of the company and that is hampering the operations of the company and making it impractical.
- The company has committed some kind of offense or breached their statutory duties.
The fees and process of liquidation of company in Singapore:
The company opting for voluntary winding up must call for an Extraordinary General Meeting (EGM) where the majority of the directors must produce a written declaration of Solvency for passing a special resolution to wind up the company.
The applicant has to pay a winding up deposit of $10,400 to the official receiver. The official receiver or an insolvency as the liquidator of the company may be appointed by the court. The other fees involved in the process can be categorised as follows:
- Document handling related fees with the official receiver ranges between $20 to $30.
- Fees related to net-assets released or received and distribution of money to creditors or contributors by the official receiver is as follows:
|Slabs||For releasing and receiving||For distribution|
|First $100,000 net assets or part thereof||10%||5%|
|Next $100,000 net assets or part thereof||5%||2.5%|
|On all further sums||2.5%||1.25%|
There are other fees involved like payment or money transfer to the creditors by the official receiver other than electronic transfer, calling or realising of property by the official receiver for debenture holders or other secured creditors. Other than this, there are fees (normally ranges from $5 to $25) for various types of applications involved in the process. For a detailed fee structure involved in the process, you can go through the Fees winding up and dissolution of companies order 2005.