A business may have to close down in certain circumstances. These circumstances may range from offenses which have been committed by the owner of the company to financial difficulties to a voluntary decision made by the owner of the company, as well as many other plausible reasons besides. In Singapore, the owners of a company or its creditors can choose to close a company when they believe that the company is no longer in a condition which is suitable for the conducting of business activities. Another entity in Singapore which has the authority to close a company is the Accounting and Corporate Regulatory Authority (ACRA). ACRA oversees the actions, operations, and incorporation of all companies in Singapore. If it deems that the conditions are suitable for a Singapore-based company to be closed down, it will go ahead and do so. However, when ACRA closes down a company in Singapore, it does not do so by force or compulsion.
How ACRA Closes a Singapore Company
ACRA will only close a Singapore-based company if the company has made an application to be closed b y ACRA. Sole proprietorships, partnerships, and private limited companies are closed by ACRA in different ways. When a sole proprietorship or partnership makes an application to ACRA for closure, it must file a Cessation of Business transaction. This is to be done online through the use of BizFile+. A CorpPass must be used by any company owner who plans to do so.
Private limited companies, on the other hand, have two possible methods of being closed down by ACRA. In the first, the company applies to be voluntarily liquidated. This method is also known as winding up. Companies which select this option must appoint a liquidator who will oversee the company’s cessation of business operations, distribution of assets among the members of the company, and payment of any remaining debts should the company have any. Private limited companies in Singapore may alternatively choose to apply to ACRA for striking off. Doing so will lead to removal from the country’s company register. This method will be approved by ACRA if the company in question has fulfilled certain criteria. Among these criteria are the closure of all of the company’s bank accounts, a lack of outstanding charges according to the Register of Charges, complete disposal and distribution of the assets and liabilities of the company, the consent of the directors of the company to its closure, and a lack of outstanding tax liabilities, among other matters. Fulfillment of all relevant criteria will permit ACRA to proceed with the striking off of the company in question.