How to Restore a Struck-Off Company in Singapore
For company owners who previously struck off their Singapore company, circumstances might have changed since the striking-off such that they want to restore the company to the register. With a view to assist such company owners, this article will cover, among other things:
- The effects of restoring a struck-off company
- When you might want to restore a struck-off company as opposed to starting a new company
- The deadline for restoring a company that has been struck off
- Who is eligible to apply to restore a struck-off company
- The process of restoring a struck-off company
- The process of restoring other businesses entities
What Happens When You Restore a Company That Has Been Struck Off?
When a company that has been struck off is restored, the name of the company is restored to the register of companies maintained by the Accounting and Corporate Regulatory Authority of Singapore (ACRA). The company is regarded as having continued in existence as if its name had not been struck off the register, and the court may give directions to place all other persons in the same position as they had been before the company had been struck off.
Additionally, the company and its directors will not be liable to a penalty for failing to:
- Lay before the company its financial statements; or
- Comply with the Accounting Standards for the financial years after the date of striking off and before the restoration of the company’s name to the register.
When Might You Want to Restore a Struck-off Company Instead of Starting a New Company?
The alternative to restoring a struck-off company could be to start a new company, but there are a few reasons why you might want to restore a previously struck-off company as opposed to starting a new one.
First, you might wish to keep your previous company name and Unique Entity Number (UEN). This is something you can do if you restore your previously struck-off company, but not if you start a new one.
Second, restoring a struck-off company might be especially appropriate if your previous company never had any financial or tax issues, and was never involved in disputes with other parties. As a result, restoring your struck-off company might allow you to get right back into business with minimal disruptions or negative consequences. On the other hand, if you start a new company, you may not be able to access the assets of the previously struck-off company, and might hence face more difficulties in resuming business.
One thing to note, however, is that if your company had debts/liabilities before being struck off, then the company would still be liable to pay off its debts after being restored.
What is the Deadline for Restoring a Company That Has Been Struck Off?
Under the Companies Act, an application to restore a struck-off company must be made within 6 years of the company’s striking off.
Who is Eligible to Restore a Company That Has Been Struck Off?
There are two processes by which a struck-off company can be restored:
- Court-ordered restoration; and
- Administrative restoration.
As the name suggests, an application has to be made to court in order to obtain a court-ordered restoration of the company to the register. If the application is successful, the court will order the company to be restored. As for administrative restoration, the application to restore the struck-off company must be made to ACRA, which will then decide whether to restore the company.
For administrative restoration, an application may only be made by a former director or former shareholder of the company. On the other hand, according to section 344(5) of the Companies Act, any person who “feels aggrieved” with the company’s striking off can apply to the court for a court-ordered restoration of the struck-off company to the register.
To show that he/she is entitled to make an application for a court-ordered restoration, the applicant must demonstrate some financial or property-related interest arising from the company’s restoration. For example, a creditor (such as a bank) would have a financial interest arising from the company’s restoration, as the creditor would be able to get the money that the company owes him/her if it is restored to the register.
By virtue of his/her position alone, a former director of the struck-off company is also entitled to apply for a court-ordered restoration. On the other hand, former shareholders of the struck-off company have to satisfy the court that he/she stands to benefit from the company’s restoration before the court will accept his/her application to restore the struck-off company.
In a case brought before the Singapore High Court, a former shareholder and director of a struck-off company applied to restore the company so he could commence legal proceedings in its name against another former director. The High Court determined that the applicant was eligible to make such an application, since he had a financial or property-related interest in the company being restored. These interests were that if the company was restored, and succeeded in its claims against the former director, then the applicant would indirectly obtain the benefits of the successful claims due to his also being a shareholder of the company.
How to Restore a Company That Has Been Struck Off
For court-ordered restoration
As mentioned above, an application has to first be made to the court to restore a struck-off company under the court-ordered restoration process. The court has a wide discretion to order the restoration of a company struck off the register. It may make such an order if it is satisfied that:
- The company was carrying on business or was in operation at the time it was struck off; or
- It would otherwise be just to make such an order.
In coming to a decision, the court will evaluate all circumstances of the case.
Examples of circumstances it will take into account include:
- The purpose of restoring the company;
- Whether there is any practicable benefit in restoring the company; and
- Whether any persons would be prejudiced if the company were restored.
If the court is satisfied that the company should be restored to the register, it should then order that the company be restored. This is unless there are any exceptional countervailing circumstances against the company’s restoration.
After the court order has been obtained, it must be submitted to ACRA via BizFile+ for the company to be restored. To do so, you would have to log on to www.bizfile.gov.sg using your SingPass. Under “eServices”, click the following: Local Company > Close a Local Company > Lodgement of Court Order for Restoration of Struck Off Company.
The application should take about 20 minutes to complete and 5 working days to process. There is no filing fee, and the only information required to complete the transaction are the company UEN as well as the abovementioned court order.
For administrative restoration
As for the administrative restoration process, an application has to be made to ACRA, and ACRA has full discretion to decide if the application should be approved. If ACRA decides that the company should not be restored to the register, the applicant or any other person aggrieved by ACRA’s decision may appeal to the court.
On the other hand, if ACRA decides that the company should be restored to the register, then the restoration takes effect as from the date that the notice of the decision is sent to the applicant. ACRA will also enter in the register a note of the date on which the restoration takes effect, and publish cause notice of the restoration on the ACRA website. The applicant need not lodge any court order via BizFile+, as per the procedure for court-ordered restoration above, before the restoration takes effect.
What If You are Looking to Restore Some Other Closed Business Entity Instead?
For limited liability partnerships, the steps for court-ordered restoration and administrative restoration above apply equally if you are looking to restore your business. However, if you are taking the court-ordered restoration route, you should click the following options under “eServices” on the BizFile+ website instead: Limited Liability Partnership > Close a Limited Liability Partnership > Lodgement of Court Order for Restoration of Struck Off LLP.
As for sole proprietorships and partnerships, only an administrative restoration process is available as the application to restore the business is made to ACRA and not to the courts. Such an application must be made within 12 months after the date on which the registration was cancelled or had ceased, or within such a longer time as the Registrar may allow. The success of the application is also subject to ACRA’s discretion and to any conditions that ACRA may impose. To make an application, you should go to “eServices” in the BizFile+ website > Business > Renew a Business > Renewal of Business Registration.
As discussed, the striking off of a company is not necessarily the end of a company. Former directors, former shareholders and persons who feel aggrieved by the striking off can apply to restore the company to the register within 6 years of the striking off.
Should you wish to restore your struck-off company to the register, consider consulting a corporate services firm to ensure a smooth and compliant process. A corporate services firm can advise you on the restoration process, eligibility and the making of the necessary applications.
Additionally, in the case of court-ordered restoration, the court may take some time to decide whether to order the restoration of your company, which can in turn lead to the incurring of expenses and loss of profits. A corporate services firm will be able to provide advice on whether such unwanted expenses can be avoided, such as through proceeding with administrative restoration instead.
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