Not every business is destined to last. Some close due to changing markets, while others wind down as owners explore new paths. In Singapore, a strike off offers a clean and efficient way to dissolve a company without the complexities of liquidation.
The process involves removing the company from the official register, but it requires careful compliance with regulations. Engaging secretarial services or a company secretary ensures the closure is seamless and meets all legal requirements.
What Does a Strike Off Mean?
A strike off is when the Accounting and Corporate Regulatory Authority (ACRA) removes a company from its register, ending its legal existence. Unlike liquidation, which involves asset sales and creditor settlements under court supervision, a strike off is designed for inactive, debt-free companies. It’s a faster, more affordable option, but only if the company satisfies ACRA’s conditions.
Eligibility for a Strike Off
To qualify, a company must have no outstanding liabilities, including taxes, debts, or legal disputes. All bank accounts must be closed, and employee Central Provident Fund (CPF) contributions settled. Directors must confirm the company is no longer operational, with no active income or expenses. Financial records and tax filings must also be current.
A strike off is not a way to evade responsibilities—the company must be fully settled before applying.
The Strike Off Process
The process begins with directors deciding to close the company and verifying eligibility. An online application, supported by documents and declarations, is submitted to ACRA. If approved, ACRA notifies the company’s registered office, directors, shareholders, and creditors, allowing time for objections.
If no objections are raised, the company is struck off the register after about four months, ceasing to exist as a legal entity.
Why Secretarial Services Matter
While the process may seem straightforward, small errors can cause delays or rejections. Secretarial services provide essential support by ensuring compliance with ACRA’s rules. For instance, unresolved annual returns or tax issues can block the application.
These services handle document preparation, draft resolutions, and track deadlines, saving time and reducing errors for business owners unfamiliar with corporate filings.
The Company Secretary’s Role
Every Singapore company must appoint a company secretary within six months of incorporation. This role ensures compliance with ACRA regulations, even during closure. For a strike off, the secretary verifies eligibility, prepares director resolutions, and submits the application. They also act as ACRA’s point of contact for any follow-up.
Without professional assistance, owners may struggle with technical requirements, such as maintaining accurate statutory records, which can complicate the process.
Common Pitfalls to Avoid
A common mistake is applying for a strike off with unresolved liabilities, such as unpaid taxes or filing fees. Another issue is failing to maintain a company secretary or local director, both required during the process. Incomplete records, like outdated shareholder details, can also cause delays.
Secretarial services help ensure these requirements are met, preventing setbacks.
How Long Does It Take?
Assuming no objections, the strike off process typically takes five months, including ACRA’s notice period. Errors or missing documents can extend this timeline. Professional support ensures a smoother, faster process.
Strike Off vs. Other Closure Options
Not all companies qualify for a strike off. Those with debts or assets may require liquidation, where a liquidator manages asset sales and creditor payments. Voluntary winding up, often for larger firms, involves resolutions and sometimes court oversight. Both are more complex and costly than a strike off, which suits debt-free, inactive companies.
A Practical Example
Imagine a small fitness studio in Singapore, dormant for years after failing to attract clients. Maintaining it incurs costs like annual filings and secretarial services. The owners opt for a strike off. Their company secretary ensures no debts or accounts remain, prepares the necessary documents, and files with ACRA. Within months, the company is dissolved.
This shows why strike off is ideal for small, inactive businesses when handled properly.
The Importance of Compliance
Compliance is critical, even during closure. A strike off is a legal process, and ACRA ensures all obligations are met to protect creditors. Secretarial services provide the expertise to navigate these requirements, safeguarding directors from potential issues later.
Conclusion
Striking off a company in Singapore is an efficient way to close an inactive business, but it requires careful execution. Secretarial services and a skilled company secretary simplify the process by managing compliance, paperwork, and deadlines. For owners ready to move on, a well-executed strike off ensures a compliant and seamless closure.
