Dissolving a corporation, commonly known as "striking off," simply involves removing the firm's name from the official record at Companies House. The corporation ceases to exist legally after dissolution. Businesses House can dissolve companies that have not followed up with their accounting duties, such as filing accounts and tax reports, even though it is a voluntary process.
To be competitive, businesses of all shapes and sizes undergo continual transformation throughout their life cycle. Change can sometimes result in the closure of a firm, a subsidiary, or even a local branch. These modifications might be the result of a larger clean-up and restructuring effort, or they could be cost-cutting efforts to reduce compliance and maintenance expenses, or they could simply be the result of the firm no longer being financially viable in the operating jurisdiction.
A director of a corporation can file a strike-off application on his or her own behalf. To minimise time, corporations generally hire their authorised company secretary or a registered filing agent. Once the application is filed to ACRA, the processing time is expected to be four months.
A company may apply to ACRA (Accounting and Corporate Regulatory Authority) to strike its name off the Register pursuant to Section 344 of the Companies Act.
Conditions required for dissolution of a company
- Since its formation, the firm has either not started doing business or has stopped trading.
- The firm owes no money to the Inland Revenue Authority of Singapore (“IRAS”), the Central Provident Fund Board (“CPF”), or any other government body, including ACRA.
- In the charge registry, there are no outstanding charges.
- There are no legal procedures pending against the firm (within or outside Singapore).
- There are no existing or pending regulatory actions or disciplinary proceedings against the firm.
- As of the date of application, the firm has no existing assets or obligations, and no contingent assets or liabilities that may develop in the future.
- The filing of the online application for striking off on behalf of the firm is approved by all/majority of the directors.
The most common causes for a company's closure
- The company has stopped operations or is no longer profitable.
- The company is insolvent because it is unable to pay its debts.
- Unresolvable conflict among shareholders
- The firm’s parent company is undergoing a corporate or financial reorganization.
- The business is closed, and the owner does not want to pay for ongoing compliance and maintenance.
- Violation of legislative provisions, including criminal offenses.