In a world that develops at such a quick speed, it is inevitable that companies will not always go as planned. There are a number of reasons for this, including a poor product-market fit, a lack of annual revenue objectives, or a desire to focus on other projects.
It is possible to dissolve your firm in Singapore in one of two ways. Your company’s debt level, tax situation, and current asset holdings should all factor into your decision.
In both cases, the company must complete all of the necessary closing procedures before it may be properly shut down. There are a variety of consequences for failing to carry out these tasks, and company owners must take prudence to avoid extra-legal duties.
Dissolving a company in Singapore may be accomplished using one of two methods.
When time and resources are at a premium, the simplest and most efficient solution is to strike out. When all of the company’s operations have been “closed,” a strike-off is the ultimate option. There are no assets or obligations (including penalties with IRAS), no ongoing ACRA problems, and no insolvency actions involving the firm at the time of this statement. The approach of putting a firm out of business is best suited for smaller or less active companies. So How to Close a Company in Singapore?
To close a company in any other case, winding it up is the only way to do it, since there is no way to entirely discharge the firm’s duties. While liquidation is occasionally used to describe the process of closing down a company, it’s more time-consuming and formal in nature. The appointment of a liquidator is important to aid in the administration of the company’s closure and the assets linked with it. No matter how much money your company has in the bank, you may start this process. For example, if your business is currently in a more vulnerable situation, liquidation is the most likely course of action.
Cutting off the existence of a company
The Accounting and Corporate Regulatory Authority (ACRA) may withdraw your firm from the Registrar if you are a company director or company secretary. All of your company’s financial obligations, including outstanding taxes and invoices, must be paid and all of its assets sold off in order to qualify. Singapore-based branch must be terminated and its assets liquidated if the head office of a foreign corporation that has a subsidiary here chooses to shut down. Taxes must be paid in full, as well as any other tax obligations, as part of the process of “striking off” a company.
We only approve applications where there are reasonable reasons to assume a business is not operating and when the business meets all of the requirements for striking off, which include the following:
It has been more than a year since the firm was formed, and/or the company has never started doing business (i.e No business transactions have taken place since incorporation)
According to the registration, there are no outstanding penalties or legal proceedings.
There are no ongoing legal proceedings or past-due penalties for the business at the moment (within or outside Singapore)
Resigning from your company
Liquidation, the legal process through which your company’s assets are converted into cash and utilised to settle its debts, is also known as winding up your business. The term “winding up” is also used to describe this procedure. Creditors and shareholders will each get a portion of the company’s remaining and surplus assets at this stage. Once this operation is completed successfully, the company’s existence will come to an end.