Strike off your company from ACRA registers
In an unfortunate event that your business cease to do operations, you will need to close the company. In case you do not close the company you will need to continue to comply with government norms every year, like AGM/ annual return and IRAS filing.
The usual route for closing the company is to strike it off from ACRA registers. Striking off is a faster, cheaper and simpler process. However there are some pre-requisites for striking off. A company which is insolvent can not go for strike off process, instead it needs to be liquidated.
Ignoring an inactive company is not a good idea. You still need to complete its annual return and also submit accounts and P&L details to IRAS. For late filing of annual return ACRA can fine you anywhere from 50 SGD to 700 SGD per year. Consistently ignoring compliance matters may result in court summon being issued in your name. Striking off the company is generally the best option in such cases.
What is the difference between strike off a company and winding up of a company (liquidation)
If the company has merely stopped the operations due to low profitability or lack of interest by the entrepreneur but has no outstanding debts, or has outstanding debts which can be easily paid of then such a company is considered as a solvent company. A solvent company can file application for strike off. Process of strike off is relatively simple and cost effective. This process can be initiated with the help of competent secretarial firm.
In case a company is insolvent, meaning it cannot pay its debts out of its assets then it cannot apply for the strike off procedure. In that case the company must go for winding up (liquidation). Winding up can be triggered either by shareholders or creditors of the company (which is called voluntary winding up) or it can be dictated by a court which is called compulsory winding up.
Winding up is essentially a complicate process where a liquidator must be appointed who will look over the distribution of assets according to legal or contractual priority.
Following conditions must be met before a company can file application for strike off
Company strike off packages
Package A : Dormant Company Strike off
For a company which is dormant since inception or since last preparation and submission of accounts. In this case there is no need to prepare fresh accounts as the company is dormant since accounts were submitted last time to ACRA and IRAS.
|Strike off dormant company|
Preparation of all resolutions, Completing pending AGMs, letters to IRAS, submission of strike off application and tracking whole process.
Package B : Preparation of accounts + strike off
This package is suitable for a company which had transactions and accounts need to be prepared. Note that legally you need to complete accounts before striking off application is made.
In this package we will first prepare the accounts and complete any outstanding matters like IRAS submission/ AGMs. Once these pending matters are completed, the application for strike off will be lodged.
|Preparation of accounts (Low volume)||900 SGD|
|Strike off process Preparation of all resolutions, letters to IRAS, submission of strike off application and tracking whole process||400 SGD|
Timeline of the strike off process
Steps involved in the strike off process
Initial visitFix up an appointment and visit our office with all your company related documents. If accounts are to be completed then bring along accounting invoices, bank statements and other expense vouchers. Our staff will go through it and ask for clarifications wherever necessary.
PaymentOnce the scope is clear, you will need to make the payment to us. You can pay by cash, nets or a locally issued check.
Preparation of accountsWe will send the details for accounts preparation (if applicable). This step usually takes 2-3 weeks. If accounts department has any further questions they will get in touch with you for clarifications. This clarifications can be done over email. Accounts once prepared will be sent for your review.
Second visitOnce the accounting task is over you will need to visit our office 2nd time. This time all shareholders and directors of the company need to visit with their NRIC / passport. In this visit you will sign all required forms and resolutions. In all approx. 8-10 documents needs to be signed. Once signing is done we will send company for strike off. We will track the strike off process and keep you updated of status.
What if a director / shareholder is not available for personal visit
Company can be still strike off. However for this the documents for this person needs to be signed off and notarised in the country of his residence and then these notarised documents needs to be couriered to us.