When you strike off a company, it simply means that you are removing it from the Register of Companies. Striking off is a cost-effective approach to closing down a business. It has, however, some requirements that need to be met. For more information, see our striking off services.
Aside from the criteria discussed in our guide, ACRA reminds businesses to clear the outstanding tax credit owing to the company before applying to strike off. Any tax credit due to your company is paid over to the Insolvency and Public Trustee’s Office (IPTO) once the company is dissolved. According to ACRA, the IPTO may require fees for processing the claim.
In Singapore, ACRA can strike a company off. Businesses can also apply to strike off should they deem it necessary. A company cannot strike off if it has debts to settle. It will go through a winding up process, instead.
ACRA Initiated Strike Off
When the register of companies, ACRA, finds a reasonable cause to believe that a business is not operating, they may initiate the strike off.
In this process, ACRA sends a notice to the company’s officers. In this letter, the registrar imposes them to present evidence that a company is still running. The deadline is set within 30 days of the date of the notice.
When there is no reply from the officers, ACRA will publish a notice regarding the forthcoming strike off in the e-Gazette. The business is now given a 60-day deadline, beginning the date of the notice, to deliver evidence that the company is still in business.
When no proof is presented, ACRA can strike off the company. They will publish a stroke off notice in the e-Gazette. Once published, the company is officially dissolved.
Striking Off by Company’s Application
As mentioned above, a voluntary strike off must satisfy requirements first. The application to strike off a company is through BizFile+. Since the process demands paperwork and compliance, a company can opt to hire a registered filing agent.
Other Requirements by ACRA
Singapore companies intending to strike off are required to clear all their taxes with the Inland Revenue Authority of Singapore (IRAS). Failure to comply will result in IRAS sending an objection against the company’s strike off. For further reading, read our post about tax obligations for companies applying to strike off.
Effects of a Company Strike Off in Singapore
According to section 344A(6) and (7) of the Companies Act, these are the three effects of striking a company off:
- Dissolution of the company
- The liabilities of the company’s members and officers remain as if it had not been dissolved
- The court has the power to wind up a company
Why Hire a Firm to Help With the Strike Off
Closing down a business is a complex and painful process that most people don’t want to go through. Aside from putting an end to a venture that costs money and effort, you have compliance requirements to adhere to. To avoid all the hassles, you have the option to hire a firm like CorpXervices. Talk to us, and we’ll help you sort out all the issues and save time.
You can run your company smarter.
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