Business · February 11, 2023

Rules to Close Business or Close Company in Singapore You Must Know!

Closing a business or a company can be an emotionally trying experience for entrepreneurs. It’s not easy to shut the doors of something you’ve worked hard to build. But sometimes it is necessary, whether as part of a downsizing process or for other reasons. If you are in Singapore and are looking to close your business or company, there are some key rules and regulations you must know before taking this step. In this article, we will discuss the different steps involved to close business Singapore or a company in Singapore and what you need to keep in mind while doing so. Read on to find out more!

What is business closure?

There are many reasons why a business may need to close, including financial difficulties, changes in the marketplace, or personal circumstances. Whatever the reason, it’s important to understand the process and know what your options are.

In Singapore, businesses can be closed through voluntary dissolution or compulsory winding up. Voluntary dissolution is when the owners of the business agree to dissolve the company and divide its assets among themselves. This option is usually only available if the business is doing well financially and there are no outstanding debts or disputes.

Compulsory winding up is when a court orders the dissolution of a company because it’s unable to pay its debts. This is a more serious situation, but it doesn’t necessarily mean that the business is insolvent. The court will appoint a liquidator to oversee the sale of assets and distribution of funds to creditors.

If you’re thinking about closing your business, it’s important to seek professional advice to ensure that you’re following all the necessary steps and procedures.

Types of company closures in Singapore

1) Company Closures in Singapore:

a. Voluntary Close Company Singapore: A company may be closed down voluntarily by its shareholders. This is also known as a members’ voluntary winding up. To do this, the directors of the company must first pass a resolution that the company is wound up voluntarily. The shareholders must then approve the resolution at a general meeting. Once the shareholders have approved the resolution, the company will be wound up and its assets will be distributed according to the provisions in its constitution or any shareholders’ agreement that may be in place.

b. Involuntary Closure: A company may also be closed down involuntarily by creditors or the court. This is known as a compulsory winding up or sometimes just called ‘winding up’. When a creditor initiates proceedings to wind up a company, they are effectively asking the court to intervene and force the closure of the company so that their debts can be repaid from the sale of its assets. The court will usually only grant an order for compulsory winding up if it is satisfied that there is no other way for the debts to be repaid and that it is just and equitable in all the circumstances to do so. Once an order for compulsory winding up has been made, a liquidator will be appointed to oversee the sale of assets and distribution of proceeds to creditors.

c. Striking Off: Finally, a company may also be ‘struck off the register of companies

The process of closing a business in Singapore

When a business owner decides to close their business in Singapore, they must follow certain rules and regulations set by the government. The first step is to notify the Registrar of Companies (ROC) of their intention to close the company. The ROC will then provide the business owner with a Notice of Intention to Strike Off form, which must be completed and returned within 14 days.

Once the form is received, the ROC will publish a notice in the Gazette announcing the company’s impending closure. This notice gives creditors and other interested parties 21 days to object to the closure. If no objections are raised, the ROC will send a confirmation letter to the business owner, at which point they can begin winding down operations.

The final step is to file a Declaration of solvency with the ROC, detailing how debts will be paid off and assets distributed. Once this is approved, the company will be officially struck off the register and ceased to exist.

Things to consider before closing your business

When you have decided to close your business or company in Singapore, there are a few things you need to take into consideration before taking the next steps. Here is a list of things to think about before closing your business:

1. Make sure you have all the required documents and paperwork in order. This includes your business registration certificate, tax clearance certificate, and any other relevant permits or licenses.

2. Notify all relevant parties of your intention to close your business, including your employees, suppliers, landlords, and customers.

3. Make arrangements for the transfer or sale of any assets owned by the company, such as office equipment or inventory.

4. Settle any outstanding debts owed by the company, including loans, taxes, and utility bills.

5. Once everything is in order and you have taken care of all the necessary details, you can proceed with officially closing your business by filing the required paperwork with the Registrar of Companies in Singapore.

How to close a business in Singapore

When you have decided to close your business in Singapore, there are a few things that you need to do in order to make sure that the process is done correctly. Here are the steps that you need to take:

1. Notify the Registrar of Companies

You need to notify the Registrar of Companies that you are planning to close your business. This can be done by submitting the required form which is available on the website of the Accounting and Corporate Regulatory Authority (ACRA).

2. Cease Business Operations

Once you have notified the Registrar of Companies, you need to cease all business operations. This includes closing down your office or shop, ceasing any online presence, and canceling any licenses or permits that you may have.

3. Inform Your Customers and Suppliers

You should inform your customers and suppliers that you will be closing your business. This will give them time to make alternative arrangements.

4. Cancel Any Bank Accounts or Contracts

You should cancel any bank accounts or contracts that are associated with your business. This includes leases, loans, and credit cards.

Conclusion

Closing a business or company in Singapore can be an intimidating process. However, understanding the regulations and guidelines will ensure that you are able to complete the process quickly and efficiently. By taking the time to research your options, develop an action plan, and keep accurate records of all transactions, you can rest assured that your business closure will go smoothly. And with these essential tips for closing a business or company in Singapore now under your belt, you are well on your way to having everything taken care of in no time!