If you do international business and are based in Singapore, you may have thought about the steps you need to take to liquidate a company. There may be many reasons for such a decision, but the fact remains that it is not an easy process and it is helpful to seek the assistance of professionals when needed.
Process for revoking business license in Singapore
You must cancel your trading license when you close your Singapore based company. If you wish to wind up your business operation in Singapore, here is what you need to do:
â— Notify the Accounting and Corporate Regulatory Authority (ACRA) to remove your company’s name from the official register. Note that this only works if you own a local business. While this is the quickest and least difficult path if you want to exit the business, you must meet the following criteria to qualify:
â—‹ Your company must have completely ceased its corporate and trading operations
â—‹ The company must be debt and tax free from the point of view of the Inland Revenue Authority of Singapore (IRAS).
â—‹ You cannot owe money to creditors. You also cannot have any claims against customers on the ACRA fee register
â—‹ You must not be involved in any local or international court proceeding or litigation
â—‹ No official measures or disciplinary proceedings may be imposed on your company
â—‹ Your company must have no outstanding tangible assets and/or debts (liabilities).
â—‹ The ACRA directors must approve your application to close your business and remove its legal name from the official register.
How to cancel your business license
You need to cancel your company GST license with IRAS as your company no longer needs it. As a rule, your trade will be deleted from the official register about five to six months after the application has been submitted. If you are a sole proprietorship or partnership, you must submit the Business Termination transaction online.
If you own a corporation (an LLC or an LLP), apply to ACRA to formally liquidate and dissolve your corporation. As part of this process, ACRA will assign an insolvency practitioner to your company. This professional manages the formal processes of valuing the company’s assets, completing operations, paying off debt, and distributing equity to the stock and stakeholders. After you have officially dissolved your company and its operations, you need to deal with the following:
â— Termination of employment – You must inform your employees that they will be out of work approximately a few weeks before the company officially closes. Many companies (although not obligated) help their employees to find a job after their official employment has ended. Your HR department should do the same. You must pay any outstanding wages, benefits, and unused vacation days. If you are unsure about the appropriate level of compensation for your employees, consult their contractual or collective agreement.
â— Distribution of Company Assets – If you own a sole proprietorship, all the assets of your company legally belong to you. However, since your business is not immune from liability, your creditors can legally force you to sell those assets to pay off your debts. Any remaining funds and/or assets are legally yours.
â—‹ If you are an owner of a partnership, the assets belong either to you or to the company. However, if you sell your business to someone else and that person does not recover your business debts from you, all of your assets legally belong to that person. See Section 44 of the Partnerships Act for more information and details.
â—‹ If you own a corporation (company), all assets belong to the company. You have no legal right to claim them for yourself. The only exception occurs when the company either has no debt or has paid all outstanding debts. In this case, you can legally claim the remaining company assets. Also remember that you must keep official books and records for a maximum period of five years after your company 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 debt or taxes. This includes any outstanding business loans. In this case, you must officially inform your creditors about the future closure of your business. You must also let them know when, how and to what extent you will reimburse them. In addition, you may engage the services of Global Corporate Advisory Services who are experienced in such procedures.
You should seek legal advice to determine which creditor claims are valid and which are not. You must also ensure that your business does not owe any government agency taxes. You can determine this using these methods:
â— Go to myTaxPortal to see all your outstanding and paid taxes. This includes corporate and GST taxes.
â— Call the IRAS 24-hour toll-free answering service. You can check the status of your corporation and GST taxes with an agent.
The winding up of a company in Singapore is associated with this
As can be seen from the information discussed, it concerns the liquidation of a company in Singapore. If you’re thinking about liquidating your business, it’s important to engage the services of a global management consultancy to take care of the real intricacies of the whole process. They take the stress out of navigating the intricacies of company laws to help you wind up a Singapore company.