How to Close a Company in Singapore (Latest 2024 Edition)

Closing a company in Singapore is a significant decision that requires careful consideration and adherence to specific legal and regulatory procedures. Understanding the correct process to close a company is vital to ensure compliance and avoid potential complications.

Understanding the process to close a company in Singapore is crucial, whether the decision is voluntary or compelled by external factors. Businesses in Singapore often choose to close due to various reasons such as financial challenges, strategic restructuring, or changes in market conditions.

The closure process, whether it’s a voluntary winding up or a court-ordered liquidation, is regulated by specific laws and guidelines. Adhering to these legal frameworks ensures the company’s closure is handled in a compliant and orderly manner, reflecting the meticulous corporate standards upheld in Singapore.

Voluntary Closure Options

1. Striking Off (Deregistration)

For companies that meet certain criteria, such as having no liabilities and obtaining consent from all stakeholders, striking off is a straightforward option. The process involves:

1. Eligibility and Preparation:
   • Clear all liabilities, including taxes and debts.
   • Liquidate all assets.
   • Ensure the branch in Singapore is liquidated if the foreign head office closes.
   • Notifying all interested parties, including IRAS, employees, and creditors.
2. Criteria for Approval:
   • No business activity since incorporation.
   • No existing assets and liabilities.
   • Disposal of all assets and liabilities.
   • Majority shareholder consent.
   • Submission of last audited accounts or unaudited balance sheet.
   • No outstanding tax liabilities or issues with IRAS.
   • No outstanding CPF contributions or GST matters.
   • No pending legal proceedings or debts.
   • No ongoing court proceedings or penalties.
3. Application Process:
   • Submit an online application via BizFile using CorpPass.
4. Post-Application Steps:
   • ACRA publishes the company’s name in the Government Gazette.
   • After 60 days from the first Gazette Notification, a second notice is published, and the company is struck off the register.
   • The process allows for withdrawal of the application during this period.
5. Handling Objections:
   • Resolve any objections within two months; the review process can take up to 4 months.
   • A company can be restored within 6 years after being struck off.
6. Post-Dissolution Requirements:
   • Retain all company books and papers for at least five years after dissolution.
   • Ensure the company’s bank account remains open until all matters are settled.

2. Members’ Voluntary Winding Up

For companies whose directors believe they can pay off debts within 12 months post-winding up start date:

• Declaration of Solvency: Signed by a majority of directors, with an attached statement of affairs.
• Extraordinary General Meeting (EGM): Held within five weeks to adopt winding-up resolutions, appoint liquidators, and approve remuneration.
• Special Resolution: Passed for winding up and appointing a professional liquidator.
• Compliance and Filing: Filing of resolution with ACRA within 7 days and advertising in local newspapers within 10 days.
• Tax Clearance with IRAS: Submission of final management accounts and tax computations for clearance.
• Final Meeting and Dissolution: After tax clearance, a final meeting is held, and the liquidator lodges a return with ACRA. Company dissolves 3 months after lodging the return.

3. Creditors’ Voluntary Winding Up

Chosen when directors believe the company can’t pay debts within 12 months:

• Creditors’ Role: Participate in decision-making, appoint a liquidator, and hold a creditors’ meeting.
• Meeting Notice: Advertised in a local newspaper at least 7 days before the meeting date.

Compulsory Closure: Winding Up by Court

The process of compulsory winding up by court order involves:

1. Applicants: Various parties can apply for a company’s winding up, including:
   • Any creditor of the company.
   • A liquidator.
   • A judicial manager.
2. Legal Procedure: An Originating Summons must be filed in court to initiate the process.
3. Grounds for Winding Up:
   • Insolvency or inability to pay debts.
   • Failure to lodge statutory reports.
   • Failure to hold statutory meetings.
   • Inactivity for a year since incorporation.
   • Usage of the company for illegal purposes.

This procedure, differing from voluntary winding up, involves a more complex legal process, usually initiated by external parties rather than the company’s members.

Financial Considerations

When closing a company, it’s crucial to address all financial obligations:

• Settling Debts and Liabilities: Ensure all creditors are paid, and outstanding debts are cleared.
• Asset Management: Liquidate assets, if any, and distribute proceeds according to legal and contractual obligations.
• Distribution of Remaining Assets: Any remaining assets after debts are cleared should be distributed among shareholders in accordance with the company’s constitution or shareholder agreements.

Tax and Compliance Obligations

Closing a business also involves settling all tax obligations with IRAS and ensuring all statutory requirements are fulfilled, including final annual returns and tax submissions.

1. Settling Tax Liabilities: Clear any outstanding tax dues with IRAS, including corporate taxes and GST, if applicable.
2. Final Tax Submissions: Submit the final set of tax returns and necessary financial statements to IRAS for assessment.
3. Statutory Compliance: Fulfill all statutory filing requirements, including submission of final annual returns to ACRA.

Record Keeping and Documentation

Even after closure, companies are required to maintain records and documentation for a certain period. This is crucial for any future audits or legal inquiries.

1. Maintenance of Records: Retain important company records, financial statements, and transaction histories for a specified period as required by law.
2. Access to Records: Ensure these records are accessible for any future audits or legal verifications.

Closing a Foreign Company in Singapore

Closing a foreign company’s branch in Singapore involves specific procedures:

1. Cease Operations: If the head office is dissolved or in liquidation, the Singapore branch must also cease operations.
2. Lodging Notices:
   • Lodge a “Notice by Authorised Representative of Foreign Company of Liquidation or Dissolution of Company” via BizFile+ if the head office is dissolved or in liquidation.
   • Lodge a “Notification by Foreign Company of Cessation of Business” via BizFile+ if the local branch in Singapore has ceased business.
3. Criteria for Striking Off:
   • Unable to resign due to lack of a replacement for the sole authorized representative.
   • No instructions received from the company for at least 12 months about its intentions to continue operations in Singapore.
   • The foreign company has no authorized representative (filing by a registered agent required).
4. GST Registration: If the foreign company or its local branch in Singapore is GST registered, cancellation of this registration with IRAS is required.

These steps ensure that the closure of a foreign company in Singapore is conducted in compliance with ACRA regulations, maintaining the proper legal and administrative standards.

To Close or Not to Close a Company in Singapore

To close a company in Singapore requires a thorough understanding of the legal processes and compliance requirements. Whether opting for voluntary closure or facing compulsory winding up, it is important to methodically follow each step to ensure a smooth transition.

This structured approach helps in responsibly winding up the business affairs and maintaining the integrity of Singapore’s business environment.

Our team specializes in providing efficient and comprehensive services for company closure, along with advice for your next venture. If you’re considering closing your business and need expert assistance or have any further questions, don’t hesitate to contact us. We’re here to support you every step of the way.