Companies incorporated in Singapore may choose to strike off the company name from ACRA register. It is important to meet the various regulatory requirements to ensure your company can be legally struck off.
In the dynamic business landscape of Singapore, companies undergo establishment and dissolution regularly. A prevalent method for dissolving a company involves the formal process of striking off, governed by Singapore’s Accounting and Corporate Regulatory Authority (ACRA). While the notion of striking off may seem abrupt, the dissolution of a strike-off company in Singapore follows a meticulous procedure overseen by ACRA.
This blog delves into the intricacies of striking off a company, exploring the step-by-step process, reasons for its adoption, available alternatives, legal considerations, and the implications on directors and shareholders. As businesses navigate this process, Tetra Consultants, a trusted entity in Singapore, plays a pivotal role in providing guidance. For those looking to register company in Singapore, understanding the nuances of striking off becomes essential in the dynamic business environment.
Submission to Accounting and Corporate Regulatory Authority (ACRA)
Tetra Consultants can assist you to legally deregister and strike off our Singapore Company in a systematic and efficient way. Our team of experts will prepare and submit to ACRA the required deregistration documents, board resolutions and final sets of financial statements.
Submission to Inland Revenue Authority of Singapore (IRAS)
Tetra Consultants will prepare and submit to IRAS the final tax computation and request for notice of no objection to ensure your business has completed all outstanding obligations. If you have registered your Singapore company for GST, Tetra Consultants will timely apply for the cancellation with IRAS.
Fees and timeline for deregistration / striking off
Assuming that Tetra Consultants is your Singapore company secretary, our one-time fee for this service is US$450 (inclusive of government fees). Otherwise, you are required to appoint us as your company sectary before we are authorised to complete the above.
On average, it will take around 5 months for the whole procedure to be completed. During the process of deregistration, you are still legally required to have a local resident director appointed, company secretary and registered office address.
How to apply for striking off your Singapore company?
As per section 344A(1) of the Companies Act, the Accounting and Corporate Regulatory Authority (ACRA) can strike a company’s name from the register upon the company’s application. Directors or a majority of them are required to make the application on the company’s behalf.
ACRA can approve the striking-off application if the company meets certain criteria:
- The company hasn’t started business since incorporation or has ceased trading.
- No outstanding debts to Inland Revenue Authority of Singapore (IRAS), Central Provident Fund Board, or any government agency.
- No outstanding charges in the charge register.
- No involvement in legal proceedings, both within and outside Singapore.
- Not subject to ongoing or pending regulatory action or disciplinary proceeding.
- No existing assets and liabilities as of the application date, and no contingent assets and liabilities in the future.
- Authorization from all/majority of the directors is required for the applicant to submit the online striking-off application on behalf of the company.
Upon receiving the application, ACRA sends a letter to the company, directors, shareholders, and secretary, informing them of the application. A notice is then published in the Gazette, initiating the process to strike the company’s name off the register.
If no one provides sufficient or adequate cause against the striking off within the stipulated time, ACRA proceeds to strike the company’s name off the register. A notice is published in the Gazette, marking the company’s dissolution upon publication.
Important factors to consider before striking off your Singapore company
Company’s Objectives:
- Before commencing the striking off process for your Singapore company, it is imperative to verify that the company has achieved its objectives, ceased operations, or entered a dormant state.
Legal and Financial Requirements:
- Directors must meticulously address all legal and financial requirements prior to initiating the strike-off process. Comprehensive services are available to assist directors in fulfilling these obligations, including settling debts and closing bank accounts.
Alternatives:
- Consider viable alternatives such as liquidation, particularly for companies with outstanding liabilities or ongoing business activities. Tetra Consultants offers expert advice to evaluate and choose the most suitable option based on your company’s circumstances.
Impact on Directors and Shareholders:
- Understanding the implications for directors and shareholders is crucial during and after the strike-off process. Tetra Consultants provides insights into how roles and responsibilities may change and offers support throughout this transition.
Striking Off Process:
- Familiarize yourself with the detailed process, involving the submission of an application, meeting legal requirements, and seeking professional advice when necessary. Tetra Consultants can facilitate a smooth striking off process by guiding you through each step.
Government Gazette:
- Publication in the Government Gazette for at least three months is a mandatory step in the striking off process. Ensure compliance with this requirement to streamline the administrative aspects of the procedure.
Objections:
- Address any objections to the strike-off application within the one-month period, and assistance is available in formulating effective responses to objections, ensuring a smoother progression through the process.
Appeal Process:
- If an appeal against the striking off order is necessary, Tetra Consultants can assist in providing compelling grounds to challenge the order, navigating the complexities of the appeal process.
Company Assets:
- For companies with remaining assets, facilitate the proper transfer of these assets to shareholders or other designated parties, ensuring a seamless conclusion to the striking off process.
Legal Connection:
- Once struck off, directors, shareholders, and officers will sever all legal connections with the dissolved company. Clarification is provided regarding the termination of duties and responsibilities associated with the company, guiding individuals through the legal disconnection process.
Companies Strike Off Regulations and Legal Compliance Process
Ensuring strict adherence to legal and regulatory requirements is paramount when initiating the striking-off process for a company in Singapore. Non-compliance can result in severe repercussions, potentially exposing directors and shareholders to legal liabilities. This section delves into the essential aspects of compliance, emphasizing the critical need to address all financial and regulatory responsibilities before commencing the strike-off process.
Meeting Financial Obligations:
- Prior to proceeding with striking off, directors and shareholders must fulfill all financial obligations, encompassing the settlement of outstanding debts, liabilities, and resolution of financial disputes. A thorough review of the company’s financial records is imperative to identify and resolve any pending financial matters.
Addressing Taxation Requirements:
- Tax compliance is integral to the striking-off process. Up-to-date tax filings and payments, covering corporate income tax, goods and services tax (GST), and other relevant taxes, are mandatory. Non-compliance may lead to penalties and legal consequences for the company’s officers.
Submitting Accurate Financial Statements:
- As part of striking off, accurate financial statements up to the cessation of business operations must be submitted, prepared in accordance with relevant accounting standards. Providing misleading or inaccurate financial information can trigger investigations and legal liabilities.
Role of ACRA and Government Authorities:
- ACRA, the regulatory body overseeing striking off, requires the submission of necessary documents, including the application for striking off and supporting information. ACRA plays a vital role in evaluating the company’s eligibility for striking off, ensuring adherence to legal requirements.
- Apart from ACRA, involvement of other government authorities depends on the business nature and industry. A comprehensive understanding of companies’ striking-off regulations is crucial for a compliant and smooth process.
Consequences of Non-Compliance:
- Failure to comply with legal and regulatory requirements during striking off can result in fines, penalties, or criminal charges for directors and officers. Incorrect striking-off processes may lead to the company’s name being reinstated on the register, causing additional complications.
Potential Liabilities for Directors and Shareholders:
- Directors and shareholders should be cognizant of potential personal liability for outstanding obligations or breaches of legal requirements during the strike-off process. This underscores the imperative of complete compliance and fulfillment of all obligations before proceeding with striking off.
Seven compulsory requirements for deregistration / striking off
- 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 proceeding.
- The company has no existing assets and liabilities as at the date of application and no contingent asset and liabilities that may arise in the future.
- All/majority of the director(s) authorise you, as the applicant, to submit the online application for striking off on behalf of the company.
Challenges you may face during the deregistration / striking off process
- IRAS may lodge an objection against strike off application
- Creditors may lodge an objection against strike off application
- ACRA rejecting the strike off application
Conclusion
- In the event your company meets any of the above challenges, our team of experts will immediately communicate with the Singapore government and provide additional supporting documents to facilitate the deregistration. From our experience, you may expect up to three weeks delay should the above scenarios happen.
- Contact us to know more about considerations before striking off your singapore company. Our team will revert back in 24 hours.
