Closing down a local organization or company is known as striking off. Suppose the company or organization is not doing business. In that case, the business can submit an application to the Accounting and Corporate Regulatory Authority (ACRA) requesting to strike off the company name from the Companies Register. First, however, the relevant company needs to meet a few criteria put in place by ACRA.
So, let’s talk about how you can strike off a Singaporean company and its procedures.
What is Striking Off a Company?
Company striking off is an option that is usually for a dormant company or inactive Singapore incorporated companies. If the owner has been letting it stay idle or never thought of the consequence of non-compliance with IRAS and ACRA regulations, then striking off is the best decision. However, it’s wise to take action before the government decides to press charges.
There are two options:
- Try to meet compliance, and talk to a professional firm to offer you proper compliance solutions.
- Strike off the company as soon as possible to avoid fines or penalties.
Note: Not all dormant companies can strike off just like that. There are specific criteria that need to be met before applying for the strike-off.
However, striking off, or in other words, deregistering a company from the register is simply about dissolving the company. The Accounting and Corporate Regulatory Authority (ACRA) can dissolve the company on its own accord.
Or the company owner/s may dissolve or strike off the company if the company stops trading or doing business or if the company’s objectives cease to exist (the purpose for starting the company).
Striking off the company doesn’t mean that the responsibilities of the members and officers have been absolved if they have not been discharged from their responsibilities.
If the company director who has been struck off had been playing the role of a director of two other struck-off companies in the last five years, the director isn’t eligible to take part in management for 5 years. This is applicable after the present (3rd) company has been dissolved.
Requirements
There could be various reasons to close the company. Even though striking off is a good decision, you must meet a few requirements if you haven’t been doing business.
As the director, you can apply to ACRA. Your application will be approved if the application meets the requirements.
- The company doesn’t do business activities anymore.
- The company has no liabilities or assets when applying or even in the future.
- The company doesn’t have any IRAS tax liabilities when applying. Primarily, the company must ensure the following:
- Up-to-date income tax returns have been submitted since the company ceased doing business.
- Before closing your company account, IRAS should have dealt with the tax matter.
- GST registration should be canceled, and nothing should be left unattended.
- The company shouldn’t have debts handled by the Central Provident Fund Board and other government agencies.
- The company isn’t involved in court proceedings of any kind (inside or outside Singapore).
- The company is a clean slate in charge register.
- The company has no pending disciplinary proceedings or regulatory action.
- The company’s shareholders (majority) have consent to strike off.
Process of Striking off a Company
The company can be struck off by the director or the Registrar (ACRA) on their own accord. We’ll explain the methods below:
1. Director striking off the company through an application
Filling the Application
The following members of the company can apply to strike off the company on BizFile+ by using the CorpPass or SingPass, if it meets the criteria:
- company secretary; or
- company’s director; or
- registered filing agent.
ACRA will send a notice to the company directors, members, and secretaries regarding the application ONLY if it’s approved.
Gazette Notifications
As per Section 334A of the Companies Act, ACRA will publish the company struck-off information in the Government Gazette if there is no objection. This is known as the First Gazette Notification and is published 30 days after the approval of the striking-off application.
This First notification states that ACRA will strike off the company in 60 days if there is no objection, with evidence proving the reason for the strike off.
Meanwhile, after 60 days, the final notice will be published in the Gazette, known as the Final Gazette Notification. This informs that the company name has been removed, and the business has been dissolved. The process usually takes around four months (the least).
The struck-off company can be restored if the application restoration happens within six years from the date of company disintegration.
Objection
As per section 344C(1) of the Companies Act, a person who has solid proof, for example, the company doesn’t meet the given criteria, can state their objection to the strike off. Once the objection receipt has been received, ACRA will inform the company’s director.
The company will be offered a two-month period to resolve the issue. If it doesn’t solve the matter in the given timeline, the application will not be accepted. Only after clearing out the objection, the business can send a new application for the strike-off.
Application Withdrawal
As per section 344B, the company can withdraw the application submitted via BizFile+ any time before it’s officially struck off. It will involve no filling charges. The Registrar will update ACRA’s website and notify the company about the withdrawal.
2. The Registrar Striking off the Company
As per Section 344 (1) of the Companies Act, the Registrar has the power to strike off the company when they have reasonable reasons to believe that the company is not carrying out its operations or trade. For example, failure to hold AGMs or file annual returns for consecutive years.
To initiate the process, the Registrar needs to send a notice to the company and its officers (e.g., directors, secretaries, and shareholders) asking them to revert within 30 days from the date of the letter with substantial proof that the company is still in business or operations.
If the company doesn’t respond, the Registrar will issue a notice and publish it in the Gazette. The company has 60 days from the date of notice to give justifications and proof as to why the company should not be struck off.
The final step is to strike off the company by publishing it in the Gazette if the Registrar doesn’t receive any correspondence within the prescribed timelines or the proofs are insufficient.
Restoring a Struck-Off Company
Any director who is discontent with the strike-off can restore the company by applying to the court. As for section 344(5) of the Companies Act, you have to appeal for restoration through a court order within six years since the strike off.
The appealing individual should be interested in restoring the company. It could be monetary or proprietary interest. Even though it’s not essential to have a strong reason, it’s important to have an interest that has actual substance.
How does the Court decide?
The court is cautious about the judgment concerning restoring a company struck off, and the court may allow it based on several reasons.
It could be because the company was doing business at the time of striking off, or it would be fair to request restoration. When deciding, the court will consider several reasons for the case. Some of the examples are:
- Restoration purpose.
- Whether there are benefits in restoring.
- Whether anyone would be harmed if the company was restored.
So if the reasons are satisfactory to the court, it’ll order to restore the company. This will work unless exceptional situations affect the company’s restoration.
Striking Off a Foreign Company
If a company’s head office is dissolved or liquidated, the foreign branch should stop its business in Singapore. The branch representative must apply “Notice by Authorised Representative of Foreign Company of Liquidation or Dissolution of Company” through BizFile+.
If the local branch of the foreign company has ended its trading or business, then the representative should apply for “Notification by Foreign Company of Cessation of Business” through BizFile+.
The foreign company can appeal to ACRA for striking off if the company can satisfy the following rules:
- The only authorized representative cannot resign because the company has not yet found a replacement.
- The authorized representative has been left unattended with no instruction about the operation for 12 months (least) even after sending notices to confirm if the foreign company wants to operate in Singapore.
- There is no authorized representative for the foreign company (Only a registered agent can do it).
However, if the local branch of the foreign company or the company itself has been GST registered, it should request a GST registration cancellation with IRAS.
Need help in Striking off a company in Singapore?
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