Striking Off a Company

What Does It Mean to Strike Off a Company?

Striking off a company’s name simply means deregistering the company from the Register of Companies. The eventual outcome is that the company will be dissolved.

Striking off may occur on the own motion of the Registrar of Companies (i.e. ACRA). One may also strike off a company’s name from the register when the company has ceased business or trading, or when the objects of the company (i.e. the purpose for which the company was set up) has ceased to exist.

Striking off does not absolve the company’s officers and members of their liabilities, if these liabilities had not been completely discharged.

If a director of the company being struck off had also been the director of at least two other companies already struck off over the past 5 years, that director will be disqualified from taking part in the management of any company for 5 years after the current (and third) company is struck off.

What is the difference between striking off and winding up?

Winding up is another way of closing a company. However, it is a more formal process that involves the appointment of a liquidator to manage the company’s closure, such as the realisation and distribution of company assets and payment of remaining debts.

If the company to be closed is not in active business, or does not have any assets or liabilities, it would be cheaper and faster to strike it off instead of winding it up.

However, if the company is insolvent, it can only apply to be wound up instead of struck off.

That said, a company being wound up may also be struck off by the Registrar when:

• No liquidator is acting;
• The company’s affairs have been fully wound up, and the liquidator has defaulted in filing any returns that they are supposed to file for 6 months; or
• The company’s affairs have been fully wound up, and the company does not have sufficient assets to pay for a court order to dissolve the company.

Striking Off a Company: Registrar’s Own Motion

The Registrar may strike a company off the Register on his own motion when he has reasonable cause to believe that the company is not carrying on business or is not in operation.

The Registrar will first send a letter to the company and its officers (e.g. directors, secretaries and members) requiring them to reply with proof that the company is still in business or still in operation within 30 days of the date of the letter.

If no such reply is received, the Registrar will publish a notice of the company’s impending striking off in the Gazette. A copy of this notice will also be sent to the company by registered post. The company then has 60 days from the date of the notice to provide proof that the company should not be struck off.

If the company does not provide proof that the company should not be struck off within this timeframe, the Registrar may strike the company off the Register. If so, the Registrar will then also publish notice of such striking off in the Gazette.

Once this notice is published, the company is officially dissolved.

Striking off a Company: Application by Company

This diagram illustrates the key steps and stages involved in a striking off application. The entire process, if there is no appeal, will take at least 4 months.

Who in the company may apply to strike it off?

The (majority of the) company directors, the company secretary or the registered filing agent can submit an online application via BizFile+ to strike off the company.

No filing fee is payable for this transaction.

What criteria must be satisfied?

ACRA may approve an application to strike off the name of a company if it has reasonable cause to believe that the company is not carrying on business and the company is able to satisfy the following criteria for striking off:

• The company has not commenced business since incorporation or has ceased trading.
• The company has no outstanding debts owed to Inland Revenue Authority of Singapore (IRAS), Central Provident Fund (CPF) Board and any other government agency.
• There are no outstanding charges in the charge register.
• The company is not involved in any legal proceedings (within or outside Singapore).
• The company is not subject to any ongoing or pending regulatory action or disciplinary proceeding.
• The company has no existing assets and liabilities as at the date of application and no contingent asset and liabilities that may arise in the future.
• All/majority of the director(s) authorise the applicant to submit the online application for striking off on behalf of the company.

Please also ensure that there is no outstanding tax credit owing to the company before applying for striking off. When the company is dissolved, any tax credit due to the company will be paid over to the Insolvency and Public Trustee’s Office (IPTO). The shareholders of the defunct company may approach IPTO if they wish to claim the tax credit. IPTO may impose charges for the processing of the claim.

It may be useful to seek legal advice on whether these criteria have been met to prevent a rejection of one’s application, as well as to pre-empt any possible objections.

Objections to the striking off application

Objections to the striking off application may be made within the specified periods under section 344C of the Companies Act (CA). Any objections may be made on BizFile+. No filing fee is payable for this transaction.

If ACRA receives any objection, they will inform the company of the objection. The company is given 2 months to resolve the matter.

If the company is unable to resolve the matter within 2 months, the striking off application will lapse. The company can only submit a fresh application after the objection has been cleared.

Withdrawal of application

A withdrawal of the striking off application may be made at any time before the name of the company has been struck off the register as provided in section 344B(1) CA. This application may be made on BizFile+. No filing fee is payable for this transaction.

Upon receipt of such notice, the Registrar will notify the company and post a notice on ACRA’s website that the application has been withdrawn.

Effects of Striking Off

There are 3 effects of striking off as provided in section 344A(6) and (7) CA. They are:

1. Dissolution of the company;
2. Any liabilities, if any, of the company’s officers and members shall continue and may be enforced as if the company had not been dissolved; and
3. If the company has not been wound up, the court has the power to do so.

Can the company’s name be restored to the Register?

A company can be restored within 6 years after the company’s name has been struck off, by a Court Order.

The Court Order must be lodged via BizFile+ and the status of the company will be updated to “live”.

There is no filing fee for this transaction.

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Should you require further assistance with striking off your company, please feel free to engage our corporate secretarial services, offered at competitive rates.