Many businesses declare bankruptcy every day due to many reasons. And in the midst of Covid19 crisis in 2020, it forced many major companies such as the car rental company Hertz to close down. According to the Ministry of Law, the companies in compulsory liquidation had risen to 312 in 2018.
There are common reasons for business to consider wind up and strike off. In this article, we are going to share about how a Singapore company applies to strike its business name off to Accounting and Corporate Regulatory Authority (ACRA) pursuant to section 344 of the Singapore Companies Act if it is no longer carrying business. In order to be qualified to strike-off business, companies need to meet the following criteria stated by ACRA.
The Strike-Off criteria :
- The company has not commenced business since incorporation or has ceased trading.
- The company has no outstanding debts owed to Inland Revenue Authority of Singapore (IRAS), Central Provident Fund (CPF) Board, and any other government agency.
- There are no outstanding charges in the charge register.
- The company is not involved in any legal proceedings (within or outside Singapore).
- The company is not subject to any ongoing or pending regulatory action or disciplinary proceedings.
- The company has no existing assets and liabilities as at the date of application and no contingent assets and liabilities that may arise in the future.
- All/majority of the director(s) authorize the applicant, to submit the online application for striking off on behalf of the company.
The Strike-Off documents :
- Declaration of Strike off
- Application for Strike off
- Tax Clearance Letter
- Waiver of Income Tax Returns ( Form C-S/c), if any
An application for striking off must be submitted to ACRA and the whole procedure will need to take up to 5 months. The first processing phase will take about 14 days to proceed, the “Striking off Notice” will be sent to the company’s registered address and residential address of directors, company secretary, and shareholders and to Inland Revenue Authority of Singapore (IRAS).
“Striking off Notice” is open for 1 month to allow for any objection to the striking-off application. Then, a notification will appear in Government Gazette, it will be open for 3 months for any interested person to raise an objection to the application. Finally, a final notification by ACRA on the company has been struck off the register and the struck off date.
However, the entire process of closing a Singapore company can be complex and time-consuming, one must ensure to comply with the legal and statutory regulations. In short, to strike off a company, it is highly recommended to seek assistance from professional service that can understand your situation and give you the best advice to assist you in accomplishing the liquidation process.
If you are considering to strike-off your company and need some administrative assistance, contact us today for a consultation on the best procedure to follow.