Strike off your company from ACRA registers

What is Company Strike off

A business once established may not work to the expectations of the promoter. It may not achieve its targets of sales, profit and hence may prove unviable for the entrepreneur to continue.

The company which is not really operative, is best put to sleep. This process is called as Strike off. Company if in spite of its dormant status remains active then the directors will need to carry out all routine compliance like conducting AGM, preparing accounts, filing IRAS and so on.

For a dormant company there is always a danger that the directors may forget about these activities and this noncompliance may attract heavy fine from ACRA or even a warrant of arrest.

ACRA Amendment Bill 2014

Non-compliant small entities, has become one of the key issue in recent times. it’s easy to incorporate a company. But then if business doesn’t takes off then it’s also easy to ignore the company. Today over 260000 companies are live in Singapore and a sizable proportion of these companies is inactive. Majority of these inactive companies are in noncompliant status and hence ACRA is taking strict view on such non-compliant companies. Two key changes will happen with this ACRA Amendment bill.

  • The fines for non-compliance ( Like failure to conduct AGM, filing AR, preparing accounts) will go up
  • Compounding of offences by paying fine will be stopped in some cases. In past ACRA used to issue summon to appear in a court to Directors in case of a persistent ignorance of company compliance.
    However it was possible to pay a fine (usually of 700 SGD) and get the summon withdrawn. However under new framework, paying the fine and getting summon withdrawn will not be possible in some cases. Director in such a cases will have to appear before the court and then pay the fines which judge may impose.

    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.

    Strike off vs Liquidation

    A company can be striked off only if it is solvent. Meaning on the date of application for strike off it does not have any external payables or the payables can be easily paid out of the assets of the company.

    If the company is not solvent, meaning if its debts cannot be paid out of its assets then it cannot opt for strike off. Instead it must go for liquidation.

    In case of liquidation a liquidator is appointed by the court to oversee the closure of the company process, who then works out the distribution of assets and its proceeds to the creditors.

    Following conditions must be met before a company can file application for strike off

    The company must have ceased trading or not commenced business from the date of incorporation

    The company must not have any outstanding tax liabilities with IRAS

    The company must not be indebted to any other government agency like IRAS, CPF board, licensing authorities

    The company must not have any outstanding charges in the company’s charge register

    The company must not be involved in any court proceedings (within or outside Singapore)

    The company must not have any current/contingent assets and liabilities

    The accounts attached must be drawn up till the date of cessation indicated in the application

    If the company is dormant then, No business transaction since incorporation or since last submission of accounts

    Not opened a bank accounts or the bank account has been closed before last submission of accounts

    No AGM is pending due or the first AGM to be held within 18 months from the date of incorporation is not due

    Steps involved in the strike off process

    Step-1Initial visit
    Fix 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. These activities can also be organised over e-mail.
    Once the scope is clear, you will need to make the payment to us. You can pay by cash, nets or a locally issued check. Bank transfer is also an option.
    Step-3Preparation of accounts
    We 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.
    Step-4Second visit
    Once 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 happens after strike off application is lodged

    Striking off notice

    Once the application for strike off is approved, ACRA will send a striking off notice to the company’s registered office address, Directors, secretary and IRAS.

    First gazette publication

    After a 1 month period, if no objection is received, ACRA will publish the name of the company in the Government Gazette. This is known as the First Gazette Notification.

    Final gazette notification

    After a 3-month period from the First Gazette Notification, if there is no objection, ACRA will publish the name of the company in the Government Gazette and the name of the company will be struck off the register. The date that the company is struck off will be stated. This is known as the Final Gazette Notification.

    Thus the entire process will take at least 5 months.

    Some frequently asked questions on Strike off

    Yes. We can still help you to strike off your company. However the strike off notice will still be sent to the secretary and the company’s registered address. If you have an agreement with them to avail their secretary services only then they can potentially object for using other company for strike off. So you will need to settle this matter with them before you proceed for strike off.

    We can help you to strike off. However Nominee Director will also need to sign some declarations. So you need to check with your existing secretarial firm if their nominee Director can sign such form if strike off process is managed by somebody else.

    No. Even if Single accounting transaction / bank transaction is passed then you have to prepare accounts and present it for strike off. Falsely claiming that your company was dormant will mean a false-statement by directors which is a serious offense under companies act. According to companies act such a person shall be guilty of an offence and shall be liable on conviction to a fine upto $10,000 or to imprisonment for a term not exceeding 2 years