Closing a Singapore Company: Striking Off, Winding Up, and Dormant Status

As businesses evolve in Singapore’s dynamic corporate landscape, companies may need to consider their future—whether through closure, dormancy, or restructuring. Understanding the differences between striking off, winding up, and maintaining dormant status is crucial for making informed decisions.

Striking Off (Deregistration)

Striking off (deregistration) is the process of removing a company from the Accounting and Corporate Regulatory Authority (ACRA) register. This option is ideal for companies with no significant assets or liabilities and usually takes 6 to 9 months.

Key Considerations:

• Liabilities remain: Striking off does not absolve directors and members from any remaining liabilities.
• Director Disqualification: Directors may be disqualified from managing companies for five years if they were also directors of two or more struck-off companies within the previous five years.

Requirements for Striking Off:

• The company has ceased operations.
• No outstanding liabilities or assets.
• No business activity for at least three months prior to application.

Striking Off Process:

1. Submit the striking-off application via BizFile+ using SingPass or CorpPass.
2. ACRA issues a striking-off notice to the company’s registered office address, its directors, and the tax authorities.
3. A 30-day objection period is allocated.
4. If no objections, ACRA publishes a Notice of Intention to Strike Off in the government gazette.
5. An additional 60-day objection period follows.
6. If no objections, a final notice is published, and the company is officially dissolved.
7. The entire process takes approximately five to six months.

Winding Up (Liquidation)

Winding up (liquidation) is a formal process that ends a company’s existence and distributes assets to creditors and shareholders. There are two main types:

1. Voluntary Winding Up

• Members’ Voluntary Winding Up: For solvent companies. A declaration of solvency must confirm the company can settle debts within 12 months.
• Creditors’ Voluntary Winding Up: For insolvent companies unable to meet financial obligations. Creditors decide on liquidation terms.

2. Compulsory Winding Up

• Initiated by a court order due to insolvency or legal reasons.

Maintaining Dormant Status in Singapore

Dormant status allows companies to retain legal entity status without actively conducting business.

Requirements for Dormant Status:

• No business activities except permitted compliance-related transactions.
• Annual obligations must be met, including filing annual returns and financial statements.

Application for Dormant Status:

• Dormant companies must file Corporate Income Tax Return (Form C-S / Form C-S (Lite) / Form C) by 30 November unless granted an exemption.

Conclusion

The choice between striking off, winding up, or maintaining dormant status depends on a company’s financial condition and future plans:

• Striking off is best for inactive companies with no assets or liabilities.
• Winding up is required for companies with outstanding debts or assets.
• Dormant status is ideal for businesses planning to resume operations later.

Given the legal and financial complexities of company closure, seeking professional guidance ensures compliance and a smooth transition. Contact us today for expert assistance.