Winding down: strike off, or keep the company dormant?

Ventures end, pivots happen, and sometimes a company simply finishes its purpose. Singapore gives you two orderly exits short of liquidation: dissolve the company by striking it off, or park it dormant at minimal cost until you know. Choosing wrongly in either direction wastes money — dormancy fees on a dead idea, or re-incorporating six months after a premature strike-off.

Strike off: the clean ending

Under s344 of the Companies Act, ACRA can strike a company off the register on application — with no government fee — where it is satisfied the company is genuinely finished:

• business has ceased (or never started);
• no assets and no liabilities at the date of application — bank accounts closed, charges discharged;
• nothing owed to IRAS or other government agencies, and all tax filings concluded;
• no outstanding ACRA filings or summonses against officers;
• the application is authorised by the directors — a majority must consent — and supported by written consent from a majority of shareholders.

The timeline runs four to six months: ACRA review, a first Gazette notice opening a 60-day objection period, then a final Gazette notice dissolving the company. Objections — from a creditor, or IRAS if returns are outstanding — pause the process while you resolve the issue, which is why the preparation matters more than the application: settle the final tax position, deregister for GST if registered, distribute any remaining funds properly, and close the bank account before applying. Remember that assets a company still owns at dissolution are effectively lost to it, and records must still be retained for five years after closure.

Dormant: the parking brake

A company with no accounting transactions in a financial year is dormant — and Singapore makes dormancy deliberately cheap to maintain:

• Audit exemption applies automatically;
• Financial statements: a dormant unlisted company (not a subsidiary of a listed one) with total assets of S$500,000 or less is even exempt from preparing statements;
• Tax: IRAS grants dormant companies a waiver of the corporate tax return on application — until then, filing obligations continue;
• What remains: the annual return, the AGM or written resolutions, a company secretary and registered office.

Realistic carrying cost: a few hundred dollars a year in secretarial fees — cheap insurance if the company holds a licence, a brand, contractual history, or simply the option of restarting without incorporating again.

Choosing

Strike off when the venture is definitively over and the company holds nothing — the compliance clock stops entirely, and permanently. Stay dormant when there is a real chance of revival within a year or two, or something of value attached to the entity itself. And if the company still holds assets or owes money, neither path fits: that is winding up territory, with a liquidator — more formal, more expensive, and worth proper advice before you begin.

Whichever way you go, the discipline is the same as at every other point in the company's life: file what is due, document what you decide, and leave clean records behind. Directors' obligations only truly end when the company does.