The company is supposed to meet certain terms and conditions given by the ACRA. In other words, the business must have ceased operations with no outstanding liabilities, and it should not be involved in legal actions.

The simple way to remove a company from the registers of ACRA is to strike it off; however, not every business qualifies for it. It is important to ensure that the company fulfills the ACRA strike-off requirements that the Singapore authorities have made.

What Does It Mean to Strike Off a Business?

Striking off a business is an administrative procedure that removes a business from the registers of the ACRA. The company ceases to exist as a legal company once it is successfully struck off from the registers of the ACRA.

Striking off is the simplest and cost-effective option to close a business for many inactive and dormant companies.

What Are the Key Conditions to Close a Company in Singapore?

The basic reason to close a business in Singapore is due to inactivity, compliance, and solvency issues. The business ought to generally meet the following criteria before applying:

• It has no assets and liabilities

• It has stopped operations

• It has no current regulatory interrogation

• There is no involvement in the case proceedings

• The company has settled all taxation matters

The directors and shareholders have a mutual consent to close a business

Should the Business Stop Operations Before Applying for Strike Off?

• Yes, a business should stop its company operations before applying. It is expected by the ACRA that no longer be running commercial operations. If the business is still actively generating business and trading, the application cannot succeed.
• The shareholders and directors should ensure that all the activities have been completed before submitting the application to the ACRA.

Can a Business Have Assets and/or Liabilities When Applying?

No, the company should not have outstanding assets or liabilities when it comes to striking off the business, as it is the most important ACRA strike off requirement in Singapore. It means that:

• Outstanding liabilities and assets should be disposed of 

• Bank accounts ought to be closed

• Debts should be settled

Outstanding obligations ought to be resolved

If the liabilities are not resolved, the winding up should be preferred instead of striking off.

Which Tax Matters Ought to Be Resolved Before Applying for Strike Off?

The businesses should ensure help ensure that all tax obligations have been addressed before applying for strike off. This may include:

• Submitting the outstanding tax returns

• Settlement of unpaid taxes

• Responding to the queries of taxation authorities

Completing the procedures of tax clearance

Can a Business Be Included in a Legal Proceeding Before Striking Off?

No, the companies can not be involved in ongoing court cases, legal proceedings, and disputes. The reason is simple, as businesses should not be removed from the register of the ACRA while legal obligations are still being determined.

How Does the Process of Strike Off Application Work?

The procedure of the strike-off application is simple when all the requirements are met.

• Step one (01) includes the review of the company status, where directors and shareholders confirm that the business has ceased operations and has no outstanding liabilities.

• Step two (02) helps in resolving the outstanding issues of liabilities, taxation, and other regulatory matters that need to be settled.

• Step three (03) helps in getting internal agreements and consents of the shareholders and directors to close the business.

• Step four (04) highlight to submit the application to the ACRA to strike off the operations through the appropriate ways.

Step five (05) includes waiting for a response in notice periods. If the company receives no objection from the ACRA, then the operations can be closed, and the company can be officially removed from its registers.

What are the reasons strike-off applications are Not Accepted?

Many applications for strike off are not accepted by the ACRA because of their eligibility criteria, such as:

• Unpaid remaining debts

• Outstanding taxation issues

• Active bank accounts

Existing legal proceeding

Example: When A Business Qualifies For Striking Off?

The example of striking off is, let’s say, a company has not been operating for the last year with no employees, no revenue, no clients, and no assets or liabilities. The directors and shareholders of a company mutually decided to close down the operations after settling the compliance obligation and closing the bank accounts of the company. In this scenario, the company is fulfilling the requirements mentioned by the ACRA to close a business for strike off.

On the other hand, if the business still has to pay debts to the vendors and has remaining legal proceedings, the option for striking off would not be appropriate.

Conclusion

In the end, it can be concluded that it is important to understand the ACRA strike off requirements that Singapore companies must meet all requirements before applying. A business that is seeking striking off ought to have ceased its operations, settled the tax matters, avoided legal proceedings, and resolved the liabilities.

Call to Inquire

Are you considering closing your business? We, at FAST ACCOUNTING, are here to help you with our experienced corporate secretarial services, which can assist in assessing if your company meets the ACRA strike off requirement. It is important to get the expert opinion before submitting the applications for strike-off to avoid delays, unnecessary compliance matters, and objections.