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Winding Up (Liquidating) a Singapore Company
Winding up is the process of dissolving a company and is also known
as company liquidation. In such a case, the company's business is closed
down, its assets are sold off, the creditors are paid, the balance of
the assets are distributed to the members and at the end, the company
ceases to exist.
Singapore Company wind up (liquidation) can happen two ways:
Voluntary Winding Up
A Singapore company can be liquidated voluntarily by its members or its
creditors. This is only possible if the company is solvent and able to
pay its debts in full within a period not exceeding 12 months from the
commencement of the winding up proceedings.
A majority of directors of the company must make a written
Declaration of Solvency at a meeting of the directors. Once this
declaration has been filed with the Registrar, the directors must send
to the members a notice of an Extraordinary General Meeting (“EGM”) to
be convened for the purpose of passing a Special Resolution to wind up
the company, and an Ordinary Resolution appointing the liquidators (and
approving their remuneration).
A Singapore company shall apply to ACRA to strike its name off the
Register pursuant to Section 344 of the Companies Act. ACRA may approve
the application if it has reasonable cause to believe that the company
is not carrying on business.
If ACRA receives any objection after approval of the application has
been granted but before the company has been struck off the Register, it
will inform the company of the objection. The company is given two (2)
months to resolve the matter. If the company is unable to resolve the
matter after two (2) months, the striking off process will be
terminated. The company will have to submit a new application again if
it still wishes to be struck off.
Compulsory Winding Up
A Singapore company may be wound up by the court if it is insolvent, unable to pay
its debts or when the court is of the opinion that it is otherwise just
and equitable that the company is being liquidated. The company itself,
its creditors, shareholders, the liquidator or judicial manager may
initiate liquidation proceedings with the High Court.
The Court may appoint a liquidator to wind up the affairs of the
Singapore company. Where no liquidator is appointed by the Court, the Official
Receiver shall be the liquidator of the company. The liquidator will
file the necessary notifications required under the Companies Act.
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