Given the distinct differences between various options of striking off or winding up that a company may take, companies should note that the type of paper documentation and the necessary filings to be made to the ACRA will be different
Singapore (PRWEB) March 06, 2015
SingaporeCompanyIncorporation.sg, a leading accounting and compliance specialist, has published a comprehensive guide on striking up and winding up procedures for Singapore-incorporated companies that have ceased to conduct business.
The portal highlights that there are several routes through which a company can choose to be struck off or wound up, namely:
A company applies to ACRA to request for its name to be struck off the Register. Applicable when the company is able to substantiate that it is no longer carrying on business and can satisfy ACRA’s criteria for striking off.
MEMBER’S VOLUNTARY WINDING UP
Applicable when the directors of the company believe that it will be able to pay its debts in full, within 12 months from the date of commencement of the winding up. A liquidator, or provisional liquidator will be appointed to assist the company in winding up its affairs and lodge the necessary returns with the ACRA as required under the Companies Act.
CREDITOR’s VOLUNTARY WINDING UP
A company that is unable to continue business due to its liabilities will typically choose this route. Similar to the previous scenario, a liquidator or provisional liquidator will be appointed to assist the company in filing all the necessary notifications as required under the Companies Act.
COMPULSORY WINDING UP
A company is wound up under an Order of Court under certain circumstances and a liquidator may be appointed by the Court to wind up the affairs of the Company. Where no liquidator is appointed, the Official Receiver shall be the liquidator of the company. A receiver will enforce a charge for the benefit of holders of debentures of the company.
As described previously, a receiver will be appointed to enforce a charge for the benefit of holders of debentures of the company. The receiver will take control of a business and its assets to assist creditors recover monies due to them.
In the case where a company is deemed by its creditors to be unable to pay its debts, but is also reasonably deemed to have the potential to do so, the Court may order that a company be placed under judicial management.
“Given the distinct differences between various options of striking off or winding up that a company may take, companies should note that the type of paper documentation and the necessary filings to be made to the Accounting and Corporate Regulatory Authority (“ACRA”), will be significantly different. In addition, the parties who should be involved will be affected,” remarked Ms Cheryl Lee, Operations Manager at SingaporeCompanyIncorporation.sg.
The Guide also notes that all of these routes would have specific steps and procedures to follow under the Companies Act; and highlights that companies are therefore highly recommended to seek good professional advice. If otherwise, the process can easily drag on for months or even years, wasting time and effort.
“Certainly, the first two options would be the preferred choice for most business owners, as it allows for business owners to retain the most amount of control over the company’s remaining assets. However, in the case where your business has been actively operating, the striking off or winding up process can be easily derailed by a misstep or two,” added Ms Lee.
To learn more, click here.
SingaporeCompanyIncorporation.sg is a portal for entrepreneurs and professionals who want to have a presence in Singapore. It is also a provider of company incorporation, as well as the related taxation and relocation services in Singapore.
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