Procedure for the liquidation of a company in Singapore

If you do business internationally and are located in Singapore, you may have given some thought to the steps you need to take to wind up a company. There may be many reasons for making such a decision, but the fact remains that it is not an easy process and it is helpful to have the help of professionals when necessary.

Procedure to cancel a business license in Singapore

You must cancel your business license when you close your Singapore-based company. If you wish to close your business operations in Singapore, you must do the following:

â— Notify the Accounting and Corporate Regulation Authority (ACRA) to remove your company name from the official register. Please note that this only works if you own a local business. While this is the quickest and least difficult route to take if you want to end business operations, you must meet the following criteria to qualify:

â—‹ Your business must have completely ceased its corporate and commercial operations

â—‹ Business must be debt and tax free from the IRAS standpoint.

â—‹ You cannot owe money to creditors. You also cannot have accounts receivable from customers in the ACRA charge register.

â—‹ You must not be involved in any local or international legal claims or disputes

â—‹ Your company must not be under any regulatory action or disciplinary process

â—‹ Your business must not have tangible assets and/or debts (liabilities) that are outstanding

â—‹ ACRA directors must approve your request to close your business and remove your legal name from the official register.

How to cancel your business license

You must cancel your corporate GST license with the IRAS because your business will no longer need it. Generally speaking, your business will be removed from the official register approximately five to six months after you submit your application, if approved. If you own a sole proprietorship or partnership, you must file the “Cessation of Business” transaction online.

If you own a business (an LLC or LLP), you will apply to ACRA to formally liquidate and dissolve your business. As part of this process, ACRA will assign a liquidator to your company. This professional will manage the formal processes of evaluating corporate assets, closing operations, paying debts and distributing capital to the stock and interested parties. Once you have officially dissolved your business and operations, you will be faced with the following:

â— Termination of employment: You will need to alert your employees that they are about to become unemployed approximately a few weeks before the company officially closes. Many companies (although they are not required) to help their employees find work after their official employment ends. Your human resources department should do the same. You must pay all outstanding wages, benefits, and unused leave time. If you are unsure of the appropriate amount of compensation for your employees, consult your contractual agreements or collective bargaining agreements.

â— Distribution of Corporate Assets: If you own a sole proprietorship, all of your business assets legally belong to you. However, since your business is not protected from liability, your creditors can legally force you to sell these assets to pay off your debts. Any remaining money and/or assets are legally yours.

â—‹ If you own a partnership, the assets belong to you or the business. However, if you sell your business to someone else and that person does not receive repayment of your corporate debts, all of your assets will legally belong to that person. Please refer to Section 44 of the Companies Act for further information and details in this regard.

â—‹ If you own a corporation (company), all assets belong to the company. You do not have the legal right to claim them for yourself. The only outstanding exception occurs if the company has no debts or has paid all debts. In this case, you can legally claim the remaining corporate assets. Also, remember that you must keep official books and records for a maximum period of five years after your corporation has been officially removed from the official register.

License cancellation in Singapore

If you want to cancel your Singapore business license, you need to make sure that your company (corporation) has no outstanding debts or taxes. This includes any outstanding business loans. In this case, you must officially inform your creditors of the future closure of your business. You must also tell them when, how, and to what extent you will finance them. In addition, you can use the services of Global Corporate Advisory Services who have experience in such procedures.

You should seek legal advice to help you determine which creditor claims are legally valid and which are not. You should also make sure that your business does not owe taxes to government agencies. You can determine this using these methods:

â— Go to myTaxPortal to see all your pending and paid taxes. This will include corporate tax and GST.

â— Call the IRAS 24-hour free answering service. You will be able to check the status of your corporate taxes and GST with a representative.

The liquidation of a business in Singapore is involved

As can be seen from the information discussed, it is about liquidating a business in Singapore. If you are thinking of liquidating your company, it is important to hire the services of a global business consultancy so that they take care of the real ins and outs of the entire process. They take the stress out and navigate the intricacies of corporate law to help you close a deal in Singapore.