Dissolving a Company in Singapore: A Guide to Strike Off

Some businesses naturally wind down, whether due to market shifts or owners pursuing new ventures. In Singapore, a strike off provides a clean and efficient way to close a company without the burden of liquidation.

The process involves removing the company from the official register, but it demands strict adherence to regulations. Utilizing secretarial services or a company secretary is key to ensuring a smooth and compliant closure.

Defining a Strike Off

A strike off occurs when the Accounting and Corporate Regulatory Authority (ACRA) removes a company from its register, dissolving its legal status. Unlike liquidation, which involves asset sales and creditor settlements under court supervision, a strike off is for inactive, debt-free companies. It’s a quicker, less costly option, but only if the company meets ACRA’s conditions.

Conditions for a Strike Off

To proceed, a company must:

• Have no outstanding liabilities (taxes, debts, or legal proceedings)
• Close all bank accounts
• Settle Central Provident Fund (CPF) contributions for employees
• Have directors confirm cessation of operations (no active income/expenses)
• Maintain up-to-date financial records and tax filings

A strike off isn’t a way to bypass responsibilities—the company must be fully resolved before applying.

The Strike Off Process

The process starts with directors deciding to dissolve the company and confirming eligibility.

An online application, including documents and declarations, is filed with ACRA. If approved, ACRA sends notices to the company’s registered office, directors, shareholders, and creditors, allowing time for objections.

If no issues arise, the company is struck off the register after about four months, ceasing to exist legally.

The Role of Secretarial Services

The process may appear manageable, but small mistakes can lead to complications. Secretarial services are invaluable in ensuring compliance with ACRA’s rules. For instance, unresolved filings or tax issues can halt the application.

These services handle document preparation, draft resolutions, and monitor deadlines, making the process easier for business owners unfamiliar with regulatory requirements.

The Company Secretary’s Responsibilities

In Singapore, every company must appoint a company secretary within six months of incorporation. This role ensures regulatory compliance, even during closure. For a strike off, the secretary:

• Confirms eligibility
• Prepares director resolutions
• Submits the application
• Serves as ACRA’s point of contact

Without expert support, owners may overlook technicalities, such as maintaining accurate statutory records, leading to delays.

Avoiding Common Pitfalls

• Applying with outstanding liabilities (e.g., unpaid taxes/fees)
• Failing to maintain a company secretary or local director
• Incomplete records (e.g., outdated director information)

Secretarial services help ensure these requirements are met, preventing unnecessary delays.

Timeline for Completion

Assuming no objections, the strike off process takes about five months (including ACRA’s notice period). Errors or missing documents can extend this timeline. Professional assistance ensures a smoother process.

Comparing Closure Methods

A strike off isn’t suitable for all companies:

• Liquidation: Required for companies with debts/assets; involves asset sales and creditor payments.
• Voluntary winding up: For larger firms; requires resolutions and court involvement.
  Both are more time-consuming and costly than a strike off, which is ideal for debt-free, inactive companies.

A Real-Life Case

Consider a small tutoring service in Singapore, dormant for years after failing to grow. Maintaining it involves ongoing costs, including secretarial services and annual filings. The owners choose a strike off. Their company secretary confirms no debts or accounts remain, prepares the paperwork, and submits the application. Within months, the company is removed from the register.

This illustrates why strike off is a practical choice for small, dormant businesses when executed properly.

Why Compliance Matters

Compliance is non-negotiable, even in closure. A strike off is a legal process, and ACRA ensures all obligations are cleared to protect creditors. Coporate secretarial services provide the expertise to meet these standards, protecting directors from potential penalties.

Conclusion

Striking off a company in Singapore is a straightforward way to close an inactive business, but it demands precision. With the support of secretarial services and a company secretary, owners can navigate compliance, manage paperwork, and complete the process efficiently. For those ready to move forward, a strike off offers a clean and compliant end to their company’s journey.