In Singapore, there are two methods for closing a company: striking off or winding up. The choice depends on factors such as your company’s tax status, asset condition, and the level of debt.
Regardless of the method, you must follow all the required procedures to properly close the business and avoid potential consequences from missing any necessary actions. Continue reading to learn about the entire process of closing a company in Singapore.
To close a limited or private limited company in Singapore, start by assessing its financial status. If your company is insolvent, winding up is the only option. However, if your company is debt-free and solvent, you can choose either to wind up or strike it off.
Strike Off a Company in Singapore
Striking off is the simpler and faster method of closing a company. It is usually suitable if your company is:
- Solvent (no outstanding debts)
- Has ceased trading or business operations
- Has no outstanding tax liabilities with IRAS
- Has no outstanding ACRA compliance filings
The Accounting and Corporate Regulatory Authority (ACRA) allows companies to apply for strike off if they meet the eligibility criteria. You can find the official details on ACRA’s strike-off process here.
Winding Up a Company in Singapore
Winding up is a more complex and formal process, usually chosen when the company is insolvent (unable to pay its debts). It involves:
- Selling company assets
- Settling debts with creditors
- Distributing remaining assets to shareholders (if any)
- Officially dissolving the company through the courts or creditors’ resolution
Winding up can take months or even years, depending on the company’s situation, and usually requires the appointment of a liquidator.
Learn more about ongoing compliance before winding up in our guide on Maintaining Company Registers.
Which Option Should You Choose?
To close a limited or private limited company in Singapore, start by assessing its financial status.
- If your company is insolvent, winding up is the only option
- if your company is debt-free and solvent, you can choose either to wind up or strike it off.
Differences: Striking off vs. Winding up
While both methods may appear similar, they are quite different in terms of complexity and duration. Striking off is a simpler process, ideal for companies with no outstanding debts. Winding up, on the other hand, is more complicated and can take years, as it involves thorough management of accounts and legal responsibilities.
Common Reasons Companies Close in Singapore
Companies may decide to close for several reasons, including:
- Business inactivity or prolonged losses
- Restructuring or group consolidation
- Director retirement or relocation
- Change in market conditions or business direction
Whatever the reason, the closure must be handled properly to avoid compliance issues.
Need advice to close your business? Contact us now!