The Accounting and Corporate Regulatory Authority oversees the actions, operations, and incorporation of all companies in Singapore. In receiving an application to strike off a company in Singapore, if it deems that the conditions are suitable company to close down, it will go ahead and do so.
Otherwise, ACRA can only force the closure of a Singapore company when there is a court order to do so. This implies that the company must have undergone a trial and court proceedings.
A company secretary usually handles the paperwork in striking off a company in Singapore. The directors will have to decide in agreement with shareholders to kick things off.
Process of How ACRA Strikes Off a Singapore Company
ACRA will only strike off a Singapore-based company if the company has made an application to be closed to ACRA. Here’s the general process of striking off a Singapore company:
- After the application to strike off the company is approved, all relevant stakeholders will be informed, along with a Striking Off Notice sent to the registered address within 14 days.
- Any objections to the application must be raised within the one-month period
- A notification for intention of strike off will be made in the Government Gazette upon the expiry of the one-month period. Any interested person can raise an objection to the strike off application for 60 days.
- If there is no objection after the 60 days from the first Government Gazette notification, ACRA will proceed to strike off the company off its register and publish the Final Gazette Notification.
Sole proprietorships, partnerships, and private limited companies are struck off by ACRA in different ways.
1. Sole proprietorships
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.
2. Private limited companies
Private limited companies, on the other hand, have two possible methods of being closed down by ACRA.
a. 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.
b. 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,
- No 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
- No outstanding tax liabilities, among other matters.
Fulfilment of all relevant criteria will permit ACRA to proceed with the striking off of the company in question.
Objections to Striking Off a Singapore Company
If there are any objections at any stage of the strike off, the company will be notified by ACRA. This means that the application will be put on hold and the company will be granted 2 months to resolve these objections.
Once all outstanding objections are cleared and resolved, the individual or company who objected the initial strike off must lodge a Clearance of an Objection to Striking Off for the process to continue.
If no resolution are found, the application will be automatically withdrawn and the company must submit a new application once the objection is cleared.
Why foreign entrepreneurs with a Singapore company should think twice before striking off
If you are a foreigner with a Singapore company, you should consider keeping your Singapore company dormant and riding a tough period out because:
- Bank accounts are getting increasingly difficult to open
If your business has been actively running with a Singapore corporate bank account, don’t waste that. Bank accounts in Singapore are getting very difficult for foreign directors to open because of a lack of tax substance or a physical presence in Singapore.
- Your Employment Pass is precious
You won’t know if the next time you plan on working in Singapore, whether you can attain one. This comes in lieu of tightened regulations on foreign workers making it difficult to be eligible, coupled with lower quotas of foreign work passes being issued. The Employment Pass requirements are also stricter, with a minimum qualifying monthly salary of S$5,000, upped from the previous S$4,500.
Instead of striking off your Singapore company, consider these 2 solutions:
- Keep your company dormant for the time being.
Compliance cost should be minimal since taxes and financial statements are nil returns. You’ll only need to attend annual general meetings and file annual returns through your company secretary.
- Seek employment and arrange a contracting type arrangement
Seek local employment in Singapore and suggest having a contracting type arrangement with your company instead of having you on their payroll.
- Look for overseas business or employment
If it is overseas employment, also suggest a contracting type of arrangement with your company. Otherwise, you may use your local Singapore company to do business with overseas clients. With this structure, there might be tax benefits as well.
How and Why Companies in Singapore May Be Forcibly Closed
1. Court orders for forced closure due to business operations
The primary reason for the forced closure of a Singapore company is that of the inability to pay all of its remaining debts. However, in certain situations, court authorities may consider it to be in the best interests of everyone involved with the company if the company were to be closed down despite the company’s lack of insolvency.
Courts in Singapore may produce court orders which force the closure of a Singapore company. Such court orders may be obtained after all necessary court proceedings have been completed. After the court order has been issued to the company, which is to be closed, the court might choose to select a liquidator who will oversee the closure of the company as mandated by the court. A court may also choose to have the Official Receiver carry out all tasks related to liquidation.
2. Forced closure under receivership
There is a second scenario in which a company in Singapore is to be forcibly closed. In such a scenario, the company is to be forcibly closed because doing so would be of benefit to everyone in the company who holds any of the company’s debentures. Such a situation will cause the company in question to be placed under receivership, which is another way of striking off the Singapore company.
Striking off a Singapore company requires much liaising between the company, creditors, government authorities and other parties in your business. Therefore, a local company secretary would be able to facilitate a smooth procedure and advise the company of proper regulations.
You can engage with an expert from Paul Hype Page. Paul Hype Page is a Full Practicing Member of the institute of Certified Public Accountants of Singapore (ICPAS) and also registered as a Public Accounting Firm with Accounting and Corporate Regulatory Authority (ACRA).
If your company has an unusual financial year period (52 weeks for example), you should notify ACRA.
Every business owner must register his/her business with ACRA as long as he/she is conducting any activity for profit continuously unless:
- The business is conducted under one’s full name as reflected in NRIC.
- The business is conducted under one or more partners using their full names as reflected in their NRICs.
An individual must be 18 years old to register a business with ACRA.
ACRA stands for Accounting and Corporate Regulatory Authority of Singapore.
A company must declare its income by completing the Income Tax Form for companies. This is known as Form C and must be completed each year.
IRAS will send the first Form C to a newly incorporated company in the second year following the year of incorporation.
Thereafter, Form C for subsequent YAs will be sent to your company in March or April every year.
You may need to request for the first Form C to be sent to you earlier, that is, in the year immediately after the year of incorporation (instead of the second year following the year of incorporation) under certain circumstances.
Note that income is assessed on a preceding year basis. This means that the basis period for any YA generally refers to the financial year ending in the year preceding the YA.
Your company is incorporated on July 1, 2007, and its financial year end is June 30.
If your company’s first set of accounts covered the period from the date of incorporation (July 1, 2007) to June 30, 2008, your accounts will be for YA 2009. You do not need to request for Form C for YA 2008.
Your company is incorporated on July 1, 2007 and its financial year end is December 31.
If your company’s first set of accounts covered the period from the date of incorporation (July 1, 2007) to December 31, 2007, your accounts will be for YA 2008. In this case, you have to request for Form C for YA 2008.
- Form C can be requested via the form titled “Request for Form C for Newly Incorporated Companies or Companies Granted Waiver to Submit Form C/Change of Particulars (36KB)”.
- If a company’s first set of accounts covered the period from the date of incorporation to December 31 of a particular year, accounts will be for the YA after the December 31 which ends the period. There is no need to request for Form C for the YA before it.
Accounts for a given period are to be submitted with the Form C. Form C will be sent to a company in March or April. When filing Form C for a YA, separate tax computations must be submitted for each of two YAs if accounts cover a period of more than 12 months. Income must also be apportioned for each period, and a letter stating that tax computations for the two YAs are enclosed must be attached.
The countries to which these tax exemptions apply are heavily involved in shipping and air routes to and from Singapore. Therefore, these exemptions encourage the people of these countries to continue to engage with and conduct business activities in Singapore.
You are required to make a declaration in your income tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (60KB) for submission to IRAS. Although you have to state the use of the foreign income in the declaration form, the usage of such foreign income will not affect the claim for tax exemption.