In recent years, Singapore has seen a surge in the number of companies being struck off its register. This is largely due to the fact that many companies are not compliant with the filing requirements under the Companies Act. If your company is not compliant, it could be struck off the register and you would not be able to continue doing business in Singapore.
If your company is feeling the effects of the global pandemic, you may be considering shutting down operations. But before you do, you should know that there are options available to you. One option is to strike off your company in Singapore. Also, there are Tax Benefits for New Start-ups in Singapore.
Why companies get struck off
Losing your company strike off in Singapore can be a very costly and stressful experience. Here are the three main reasons why companies get struck off:
- Lack of compliance with statutory requirements: All companies are required to file their Annual Returns and Financial Statements with ACRA. If a company fails to do so for 3 consecutive years, it will be automatically struck off the Register of Companies.
- Ceasing of business operations: If a company ceases its business operations for more than 12 months, it is also liable to be struck off the Register of Companies. This is because the company is no longer considered active and may pose a risk to the public if its status is not updated.
- Fraudulent activities: Finally, if a company is found to have been involved in fraudulent activities, it will also be struck off the Register of Companies.
The consequences of being struck off
If a company is struck off the register, it will no longer exist as a legal entity. This means that the company will be unable to enter into any contractual agreements or transactions, and any existing contracts will become void. The company will also be dissolved and its assets will be distributed among its shareholders.
The shareholders of a struck-off company may be held liable for the debts of the company. If the company was struck off for failing to pay taxes, the shareholders may be required to pay back taxes owed. Shareholders may also be held liable for any injuries or damages caused by the company’s products or services.
A company that has been struck off can apply to have its name reinstated, but this process can be costly and time-consuming. It is important to consult with a lawyer before taking any action.
How to avoid being struck off
To avoid being struck off, companies should ensure that they comply with their filing requirements and submit their annual returns and financial statements on time. They should also maintain good communication with ACRA and update them of any changes to their contact details or registered address.
In conclusion, it is important for companies to be aware of the risks of being struck off in Singapore. This includes not only the financial and reputational impact, but also the potential legal implications. Companies should take steps to ensure that they are in compliance with the requirements of the Companies Act, and should seek professional advice if they have any questions or concerns.