If you do international business and are located in Singapore, you may have pondered the steps you must take to liquidate a company. There maybe many reasons behind taking such a decision but the fact remains that it is not an easy process and it does help to take the assistance of professionals when needed.
Procedure to cancel trade license in Singapore
You must cancel your trade license when you close your Singapore-based company. If you want to wind up your Singapore business operations, you must do the following:
â Notify the Accounting and Corporate Regulatory Authority (ACRA) to take your company’s name off of the official register. Note that this only works if you own a local business. While this is the quickest and least difficult route to take if you want to end business operations, you must meet the following criteria to qualify:
â Your business must have completely ceased its corporate and trading operations
â The business must be debt and tax-free from the standpoint of the Inland Revenue Authority of Singapore (IRAS).
â You can’t owe any money to creditors. Nor can you have accounts receivables from customers in the ACRA charge register
â You must not be involved in any local or international lawsuits or legal disputes
â Your company must not be under any regulatory actions or disciplinary proceedings
â Your company must not have any tangible assets and/or debts (liabilities) that are outstanding
â The Directors at the ACRA must approve your application to close your business and strike its legal name off of the official register.
How to cancel your business license
You must cancel your corporate GST license with the IRAS because your business will no longer be needing it. Generally speaking, your business will be removed from the official register approximately five to six months after you submit your application if it is approved. If you own a sole proprietorship or partnership, you must file the “Cessation of Business” transaction online.
If you own a company (an LLC or an LLP), you’ll be applying to the ACRA to have your business formally liquidated and dissolved. As part of this process, the ACRA will assign a liquidator to your company. This professional will manage the formal processes of assessing corporate assets, closing operations, paying off debts, and distributing equity to the share and stakeholders. Once you have officially dissolved your business and its operations, you’ll be dealing with the following:
â Terminating employment – you’ll need to alert your employees that they’re about to become jobless approximately a few weeks before the company is officially closed. Many companies (though not required) to help their employees with finding jobs after their official employment has ended. Your HR department should do the same. You must pay all pending salaries, benefits, and unused leave time. If you are unsure as to the appropriate amount of compensation for your employees, consult with their contractual agreements or collective agreements.
â Distributing corporate assets – if you own a sole proprietorship, all of your business’s assets legally belong to you. However, since your company is not protected from liability, your creditors can legally force you to sell these assets off to pay off your debts. Any remaining money and/or assets are legally yours.
â If you own a partnership, assets either belong to you or to the business. However, if you sell your business off to someone else and that person doesn’t receive reimbursement from you for your corporate debts, all of your assets will legally belong to that person. Refer to Section 44 of the Partnership Act for more information and details regarding this.
â If you own a corporation (company), all assets belong to the company. You don’t have the legal right to claim them for yourself. The only exception occurs if the company either has no debt or has paid off all outstanding debts. In this instance, you can legally claim the remaining corporate assets. Also, remember that you have to keep official books and records for a maximum period of five years after your corporation has been officially removed from the official register.
License cancellation in Singapore
If you want to cancel your Singapore business license, you have to make sure that your company (corporation) has no outstanding debts or taxes. This includes any outstanding business loans. In this instance, you are required to officially inform your creditors of the future closure of your company. You must also inform them when, how, and to what extent you will reimburse them. Additionally, you can utilize the services of Global Corporate Advisory Services that are experienced in such procedures.
You should seek legal counsel to help you determine which creditors’ claims are legally valid and which are not. You also have to make sure that your company doesn’t owe any government agency taxes. You can determine this using these methods:
â Go to myTaxPortal to see all of your outstanding and paid taxes. This will include Corporate and GST taxes.
â Call the IRAS 24 hour toll-free answering service. You’ll be able to inquire about the status of your Corporate and GST taxes with a representative.
Winding up a business in Singapore is involved
As is evident from the information discussed, winding up a business in Singapore is involved. If you are thinking about liquidating your company, it is important to hire the services of a global business consultancy to let them handle the true intricacies of the entire process. They take away the stress and navigate the intricacies of the corporate laws to help you wind up a business in Singapore.