Closing a business is a major decision, and the method you choose can affect your finances, timeline, and peace of mind. In Singapore, you can either strike off or liquidate a company. These options differ in cost, complexity, and purpose, and choosing the wrong one can lead to delays or legal trouble.
This guide explains both processes to help you make the right choice.
Striking Off: The Basics
Striking off is a quick and budget-friendly way to dissolve a company. It involves asking ACRA (Singapore’s corporate regulator) to remove your company from its register.
It’s ideal for:
- Companies that are no longer active.
- Businesses with no debts or liabilities.
- Firms with all tax obligations met.
- Companies with no assets.
How Striking Off Works
- Submit an application to ACRA.
- ACRA reviews it, possibly requesting more details.
- If everything is in order, the company is struck off in about 4 months.
Striking off is efficient, but it’s not an option if the company has outstanding debts or disputes. In those cases, liquidation is required.
Liquidation: The Basics
Liquidation is a formal process to close a company’s operations. It involves selling off assets, settling debts, and distributing any remaining funds to shareholders.
There are two main types:
- Voluntary liquidation: The company opts to close, often due to financial struggles or redundancy.
- Compulsory liquidation: A court mandates closure, usually over unpaid debts.
Liquidation is the right choice when:
- The company has debts or assets to manage.
- There are disputes among stakeholders.
- A formal process is needed to satisfy legal standards.
A professional liquidator oversees the process, and many firms offering corporate secretarial services assist with the paperwork and compliance.
Striking Off vs. Liquidation: A Comparison
| Aspect | Striking Off | Liquidation |
|---|---|---|
| Cost | Affordable | More costly (legal and admin fees) |
| Duration | ~4–6 months | 6 months to over a year |
| Debts Allowed? | No | Yes (handled by liquidator) |
| Ideal For | Inactive, clean companies | Companies with debts or disputes |
| Court Involved? | No | Yes, in compulsory cases |
Pitfalls to Watch Out For
- Striking Off with Unpaid Debts
ACRA won’t allow a strike-off if debts remain. Pay them off or pursue liquidation. - Ignoring Paperwork
Both processes require current records, including tax filings and financial statements. Gaps can cause delays. - DIY Without Guidance
Closing a company involves legal nuances. Secretarial services in Singapore can streamline the process and prevent mistakes.
When to Strike Off
Choose striking off if:
- The business is dormant with no activity.
- All debts and taxes are settled.
- You want a fast, low-cost exit.
- There’s no plan to revive the company.
It’s a simple way to close a clean business.
When to Liquidate
Choose liquidation if:
- The company has debts or assets to settle.
- There are legal or stakeholder issues.
- A formal process is needed for credibility.
It’s more involved but ensures everything is handled properly.
Act Sooner Than Later
Procrastinating can increase costs and compliance tasks. Even dormant companies must file annual returns and pay fees. Closing promptly saves effort.
If you’re unsure, talk to experts in corporate secretarial services. They can evaluate your case and recommend the best approach.
Closing with Ease
Striking off and liquidation are effective ways to end a business. By choosing the right method, following the steps, and getting professional help, you can close your company cleanly and move on without stress.
