Shutting down a business is a big decision, and the way you do it matters. In Singapore, you can choose between striking off or liquidation. These options differ in cost, complexity, and purpose, and choosing the wrong one can result in delays, extra costs, or legal trouble.

This guide simplifies both processes to help you make the best choice.

What Is Striking Off?

Striking off is a quick and budget-friendly way to dissolve a company. It involves asking ACRA (Singapore’s business regulator) to remove your company from its register.

It’s ideal for:

• Companies that have stopped all activities.
• Businesses with no debts or liabilities.
• Firms with all tax obligations met.
• Companies with no assets.

How Striking Off Works

1. Submit an application to ACRA.
2. ACRA reviews it, possibly asking for more information.
3. If everything is in order, the company is struck off in about 4 months.

Striking off is efficient, but it’s not an option if the company has outstanding debts or disputes. In those cases, liquidation is the way to go.

What Is Liquidation?

Liquidation is a formal process to close a company’s operations. It involves selling off assets, paying creditors, and distributing any remaining funds to shareholders.

There are two main types:

• Voluntary liquidation: The company opts to close, often due to insolvency or redundancy.
• Compulsory liquidation: A court mandates closure, usually over unpaid debts.

Liquidation is necessary if:

• The company has debts or assets to settle.
• There are disputes among stakeholders.
• A structured process is required to meet legal standards.

A professional liquidator oversees the process, and many firms offering corporate secretarial services assist with the paperwork and compliance.

Striking Off vs. Liquidation: A Comparison

Pitfalls to Watch Out For

1. Striking Off with Unpaid Debts
   ACRA won’t approve a strike-off if debts remain. Pay them off or pursue liquidation.
2. Ignoring Paperwork
   Both processes require current records, including tax filings and financial statements. Gaps can cause delays.
3. DIY Without Guidance
   Closing a company involves legal nuances. Secretarial services in Singapore can streamline the process and avoid mistakes.

When to Choose Striking Off

Go with striking off if:

• The business is dormant with no activity.
• All debts and taxes are cleared.
• You want a fast, low-cost exit.
• There’s no plan to revive the company.

It’s a simple way to close a clean business.

When to Choose Liquidation

Choose liquidation if:

• The company has debts or assets to manage.
• There are legal or stakeholder issues.
• A formal process is needed for credibility.

It’s more complex but ensures everything is handled properly.

Don’t Procrastinate

Waiting too long to close an inactive company can lead to extra costs and compliance tasks. Annual filings and fees still apply, even for dormant businesses. Acting sooner saves effort.

If you’re unsure, talk to experts in corporate secretarial services. They can evaluate your case and recommend the best approach.

Closing with Ease

Striking off and liquidation are effective ways to end a business. By choosing the right method, following the steps, and getting professional help, you can close your company cleanly and move on without stress.