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Epica Guide Series

A Guide to Singapore Company Liquidation

This article describes the meaning of a company in liquidation and its closing process in Singapore. It will cover the following topics.

Watch the video or read below

Singapore Company Winding up Guide. What is Singapore Company Liquidation.


Sometimes, the business plans do not work out as expected. There could be many reasons for this. However in these cases it doesn’t make sense to keep the company live. The option for the entrepreneur in this case is to close down one's venture. Some of the primary reasons for business closure are as follows:

  • Indebtedness
  • Financial struggles
  • Unsuccessful business model
  • Differences between owners
  • Old age of owners
  • Changing market scenarios
  • Product no more in demand
  • Criminal cases on the company

Meaning of liquidation

Liquidation refers to the process of seizing and realizing (converting into cash) the company's assets to pay off the company's creditors, liabilities, and debts. If a company is in liquidation, it means it is going to shut down soon and has already stopped all its business operations.

Types of liquidation

There are two different methods to close a company in Singapore.

  • Winding-up
  • Striking off

Striking off is a method that is more suitable for inactive or dormant companies which are solvent. These types of companies are no longer in business. They typically don’t have any debt which can not be paid. Therefore, they do not tend to have any assets or liabilities.

However for insolvent companies, the only method to cease its existence is by winding up.

What is the meaning of winding up?

Winding up is the formal liquidation of the company. It is the procedure of orderly winding-up of the company's operations. It involves:

  • Ceasing company's operations
  • Hiring a liquidator who supervises the realization of the assets
  • Debt payments (if applicable)
  • Distributing the surplus assets (if applicable)

The winding-up procedure ensures that the company's assets are distributed among its creditors and members fairly. Once all the debts and liabilities are paid off, the company's existence is terminated. The laws to wind up a Singapore company are set out by the IRDA (Insolvency, Restructuring, and Dissolution Act).

Different methods to wind up a Singapore company

Singapore Company Liquidation - Different methods

The winding-up procedure can be used to liquidate both a solvent company and an insolvent company.

Therefore, you can wind up a Singapore company in three different methods.

For a solvent company:

  • Can be wound up with a members' voluntary winding up

For an insolvent company:

  • Can apply for a creditors' voluntary winding up
  • Involuntary winding up, also known as Compulsory winding up, by a court's order after an application from a creditor

Determining a company's solvency

A company's solvency status determines its winding-up method. Hence, it is imperative to confirm the solvency status of a company beforehand.

Singapore law has set up two tests that determine if a company is solvent or insolvent.

  • Cash flow test – In this test, the company fails to meet a current debt demand.
  • Balance sheet test – In this test, a deficit is presented by the company after the balancing of its total liabilities against its total assets.
Singapore Company Liquidation - Company's solvency

IRDA also has specific provisions that declare a company insolvent in the following conditions:

  • A company's creditor serves a statutory demand on the company for a sum of S$15000 or more. In case the company fails to pay or secure the sum to the creditor's reasonable satisfaction after three weeks since the demand was served, it will be declared insolvent.
  • A company's creditor enforces a court judgment or order for a specific amount of money against the company. If the creditor could not recover the entire amount, the company will be declared insolvent.
  • The court is confident that the company cannot pay its outstanding debts. You can prove it to the court's satisfaction by taking the company's contingent and prospective liabilities into account.

Members' voluntary winding up in Singapore

This method is only applicable if the company is solvent. Being solvent means that a company can pay its entire debts and liabilities within 12 months from the winding-up procedure's commencement date.

Singapore Company Liquidation - Solvent company

Reasons to wound up a solvent company

Some of the most common reasons why a solvent company would want to wind up are:

  • Business activities are ceased, and the company is not profitable anymore. Hence, its owners are not willing to incur the ongoing maintenance and compliance costs.
  • The company belongs to a group that is going through corporate or financial restructuring
  • Irrevocable disputes among the company's shareholders restricting the company's continued operations

Singapore Company Liquidation - Members' voluntary

Members' voluntary winding-up process

A solvent company in Singapore must take a few steps to commence a members' voluntary winding up.

As the first step, company directors must file a Declaration of Solvency with ACRA on its online portal, BizFile+. The declaration states:

  • Company directors have made an inquiry into matters of the company
  • Company directors held a meeting and formed an opinion that all the company's debt can be cleared within twelve months after the commencement of winding up

Directors are held guilty of an offense if they make the Declaration of Solvency without any reasonable grounds for their opinions. They may face:

  • Fine of S$5000
  • Imprisonment up to 12 months
  • Both

With the Declaration of Solvency, a statement of affairs must be attached. This statement must be following Form VWU-9, which can be found on the Insolvency Office of the Ministry of Law's website. It must show the latest:

  • Company's assets and expected total amount realized from them
  • Company's total liabilities
  • The estimated cost of winding up

An EGM (Extraordinary General Meeting) of the company's members must be held within five weeks after filing the Declaration of Solvency. They must pass a special resolution in the EGM, declaring the company's winding up.

After passing the resolution, the company must:

  • Lodge a resolution's copy with ACRA within seven days from the date of the resolution
  • Give the resolution's notice in the Gazette and one English local daily newspaper
  • Appointing a liquidator to wind up the company's affairs and equitably distribute the company's assets

You must note that the company's directors lose their powers after a liquidator's appointment. However, a liquidator can allow the directors to use their powers.

Creditors' voluntary winding up in Singapore

The winding-up procedure for an insolvent company is quite different. There are two methods to wind up an insolvent company in Singapore.

  • Creditors' voluntary winding up
  • Winding up by a court's order

Procedure for creditors' voluntary winding up

The company initiates the creditors' voluntary winding up and not the creditors. However, creditors have a saying in the following matters:

Singapore Company Liquidation - Creditors' voluntary
  • The company should or should not be wound up
  • Appointment of a liquidator

The creditors' voluntary winding-up procedure is similar to the process of the member's voluntary winding-up. However, two more steps are required for this procedure:

  • Appointing a provisional liquidator
  • Holding a creditors' meeting

The steps involved in a creditors' voluntary winding up in Singapore are in the following order.

Singapore Company Liquidation - Statutory declaration

Lodging the statutory declaration

The company's directors must prepare a statutory declaration and lodge it with the Official Receiver. Another statement as per Form VWU-1 is lodged with ACRA stating:

  • The company is discontinuing its business activities due to liabilities
  • A creditors' meeting will be held within 30 days from the date of the declaration

The declaration to ACRA must include the company's name and identities of all the directors who have made the declaration.

Appointing a provisional liquidator

A provisional liquidator is either an insolvency practitioner or the Official Receiver. Generally, a licensed insolvency practitioner is considered for this role. A provisional liquidator must ensure that the company's assets are preserved and do not disappear until the company is wound up.

Singapore Company Liquidation - Provisional liquidator

Within 14 days after appointing a provisional liquidator, the company must advertise the notice of his/her appointment and the declaration (mentioned above) in the Gazette and one English local daily newspaper.

A provisional liquidator remains appointed until:

  • A month
  • A new liquidator is appointed

Do note that the Official Receiver can extend the appointment period of the provisional liquidator.

Holding the creditors' meeting

The company must hold a creditors' meeting on the day, or a day after, the special resolution is proposed for the company's winding up. This meeting must be held at a convenient place and time for the creditors with the majority in value.

Singapore Company Liquidation - Creditors' meeting

Creditors' meeting notices are sent at least ten days prior to the creditors' meeting and:

  • Must include a statement that demonstrates all the creditors' names with their respective claim amounts
  • Must be sent at the same time with the company meeting notices' sending
  • Must advertise the notice of the creditors' meeting at least seven days before the meeting date in the Gazette and one English local daily newspaper

At least one company director must attend this meeting.

Also, one of the company directors must also create the following statements before the creditors' meeting:

  • List of creditors with their respective estimated claim amounts
  • Statement of the company's affairs that describe the methods and manners in which the company's assets are evaluated

Winding up by a court's order in Singapore

A company or other parties can obtain a court order to wind up a company. Such an application to the court can be made by:

  • Company's director
  • Company's creditor
  • Company's liquidator
  • Company's judicial manager

Reasons other than insolvency for winding up a company with court's order

Singapore Company Liquidation - Insolvency winding

Other than insolvency, there could be multiple situations in which the court can order the winding up of a company, including:

  • The company has no members
  • Company directors have acted in the company's affairs in their own interest rather than the company's interest
  • The company does not initiate any business activities during the first year after its incorporation
  • Company suspends its operations and commercial activities for more than a year
  • The company got involved in illegal activities

The court can also order a company winding-up if it believes it is fair and equitable. Multiple scenarios can be shown by an applicant under which the court may order a company's winding up.

  • The company's minority shareholders apply for winding up because they face oppression by the company's majority shareholders
  • The company operates in a fraudulent manner
  • Deadlock in the company's management
  • Main objects of the company are not achieved, i.e., the purpose of incorporating the company is not fulfilled

Procedure for winding up a company by the court's order

Singapore Company Liquidation - Procedure winding

Form CIR-12 must be filed with a supporting affidavit to obtain the court's order in order to wind up a company. The winding-up application has to be served on the company's directors, employees, members, Official Receiver, and insolvency practitioner nominated to be the liquidator (if any).

A minimum of five days before the hearing of a winding-up application, you must file an affidavit of service with the court. A total deposit fee of S$10,400 is also needed to be paid to the Official Receiver to create the application for winding up.

Also, you must give the winding up application notice at least seven days before the hearing of the application:

  • Once in the Gazette
  • Once in an English local daily newspaper

A party that intends to attend the winding up application hearing must serve an intention-to-appear notice as against the application making party. The intention-to-appear notice must be in accordance with Form CIR-15.

Any party that intends to oppose the winding-up application needs to file and serve an affidavit at least five days before the hearing.

Winding up Procedure in Singapore

The company winding-up process includes the company ceasing all its activities, paying all debts to the creditors, and realizing all assets to make a final payment to its members. There are specific steps for a company to close its business in Singapore:

  • Retrenching the company's employees properly
  • Terminating the internet and phone subscriptions
  • Informing customers that the company will not conduct any business anymore
  • Terminating all the contracts that the company has with business partners
  • Deregistration of various licenses and permits (if applicable)
Singapore Company Liquidation - Debts from

Proof of debt by the creditors

To claim their debts from the company, creditors must file proof of debt against the company in accordance with Form CWU-1. The evidence of debt must include the following:

  • Name and address of the creditor
  • Total creditor's claim amount on the date when winding up was initiated
  • If the Claimed amount incurs any interest that is being imposed on the principal debt

Payment order after the company's assets are realized

A liquidator has the responsibility to distribute the company's assets in a particular order to its members and creditors. Following is the payment order of the funds available for distribution.

Singapore Company Liquidation - Payment order
  • Secured creditors
  • Preferred creditors under the IRDA in the given order
    • Official Receiver who incurs the expenses and cost of company's wining up
    • Liquidator's remuneration
    • The cost incurred by the applicant for the winding-up order
    • Employees' wages and salaries, including reimbursements and allowances under the employment contract (up to a maximum of five months' salary or S$13,000 whatever is lesser)
    • Pending ex gratia payment or retrenchment benefits to the company's employees (capped at five months' worth of payment or S$13,000 whatever is lesser)
    • Work injury compensation amount that is due to the employees
    • Pending CPF (Central Provident Fund) contributions of the company's employees (worth up to 12 months' contributions for every employee)
    • Remuneration to employees in respect of a vacation leave that is unconsumed (up to a maximum of five months'worth of payment or S$13,000 whatever is lesser)
    • Total assessed taxes (including GST)
  • Creditors with floating charge over assets
  • Unsecured creditors
  • Company's members

Under certain circumstances, a company may not have enough funds to pay its unsecured creditors. In this scenario, the debt owed to them is either reduced in equal proportions or entirely left unpaid.

Singapore Company Liquidation - Winding formalities

Post winding up formalities

After the company's been wound up, the liquidator must draw up an account that demonstrates the following:

  • How the company's winding-up procedure was conducted
  • How the company's property was disposed of

The liquidator must also have regard to the directions given by the creditors' resolution.

A creditor must also explain how a particular account is computed after preparing it. He/she call for and demonstrate the account at:

  • Company's general meeting when there is a members' voluntary winding up
  • meeting of company's members and creditors in case of creditors' voluntary winding up

A liquidator must publish an advertisement to call a meeting. You must take care of the following things while posting the ad:

  • must publish it at least 30 days prior to the meeting
  • must publish it in the Gazette and an English local daily newspaper
  • must clearly specify the meeting's purpose, time, and place
  • must send its copy to the Official Receiver within seven days from the publishing date of the advertisement

The liquidator must lodge a return of holding and meeting's date to ACRA and the Official Receiver within seven days after the meeting is held. It is the liquidator's responsibility to notify the Official Receiver and the ACRA if a quorum was not present at the meeting. He must inform them that a meeting was held, but no quorum was present.

A quorum constitutes when:

  • minimum of two members of the company are present (members' voluntary winding up)
  • minimum of two members and two creditors are present (creditors' voluntary winding up or winding up by the court)

The company gets dissolved after three months from the lodging of the return. Though the company's liquidator, or someone who might be interested, can apply to the court to declare its dissolution as void. This application can be made any time within two years from the dissolution date.

The steps above are too complicated and required much documentation that must be adequately done without fail. Therefore, it is advised to engage a professional service provider with experience in this field, just like Epica.

What is a company strike off?

The Company Registrar in Singapore can strike off a company from the Register as per Section 344 of the Singapore Companies Act. You can apply for a strike-off if the company is solvent and is no longer in business. It is a faster and more convenient procedure than winding up and generally applies to dormant or small companies.

Criteria for striking off

Singapore Company Liquidation - Criteria for striking off

ACRA will approve the strike off application if it has reasons to believe that your company is no longer operational and it satisfies the following strike-off criteria:

  • The company has never commenced any commercial activities since its incorporation, or it has ceased all its business before the time of application
  • The company is not a part of any legal proceedings in Singapore or any foreign countries
  • The company has no assets or liabilities during the application
  • There are no outstanding liabilities with the CPF Board, IRAS (Inland Revenue Authority of Singapore), or any other government authority.
  • There is no pending disciplinary proceeding or regulatory action.

In case a company has been dormant since its incorporation, it must also demonstrate that:

  • No business transactions were made since the incorporation
  • The company did not open a corporate bank account or opened but closed it without getting engaged in any transactions
  • No AGM (Annual General Meeting) has been held yet

The company must not be older than 18 months to fall into this category as all Singapore-incorporate companies must hold their first AGM within 18 months from incorporation.

Singapore Company Liquidation - Settling tax affairs with IRAS

Settling tax affairs with IRAS

A company is not deemed inactive as long as it has outstanding liabilities with IRAS. The company must clear all its dues and deal with all the queries IRAS raises.

The first step includes canceling the GST (Goods and Services Tax) registration (if it's applicable). You can easily cancel your GST registration by filling an online form on myTaxPortal. The application usually takes a day to process. However, it may take about ten working days in some cases.

The next step involves submitting all the pending ITR (Income Tax Returns).

  • Companies that file Form C must also provide the accounts and other relevant tax computation details up to the date it ceases its operations.
  • Small companies that file Form C-S are not required to submit the accounts and tax computation details. However, it is recommended to prepare the details in case IRAS asks.
  • Dormant companies must apply for a Waiver of filing Income Tax Returns.

The IRAS does not issue a letter of tax clearance. Hence, you must use the latest Statement of Accounts and Notice of Assessment to demonstrate the above.

Strike off procedure

All the company's shareholders must consent to the company striking off by submitting a letter of consent to the company. In the next step, the company must lodge an application with ACRA for striking off on its online portal, BizFile.

Singapore Company Liquidation - Strike off procedure

If ACRA has reasonable cause to believe that the company fulfills all the striking off requirements, it will send a 'striking off' notice to the:

  • Company's registered office address,
  • its officers' (company secretary and directors) residential addresses, and
  • Singapore tax authorities

If no one objects to the striking off, ACRA will publish the First Gazette Notification after a month of the striking off letter. It publishes a Final Gazette Notification after three months from the First Gazette Notification. The struck off date will be slated.

A company can withdraw its striking off application until five days before the strike off date.

Procedure to close a foreign company in Singapore

Singapore Company Liquidation - Close a foreign

The guidelines above for striking off or winding up apply to a local company in Singapore. Foreign businesses that own a representative or branch office in Singapore must inform the IRAS in writing before ceasing their business activities in Singapore.

A foreign company needs to dissolve its local branch under two scenarios. The authorized representative of the branch must file two different notices for both these scenarios.

  • 'Notice by Authorised Representative of Foreign Company of Liquidation or Dissolution of Company' when the head office is dissolved
  • 'Notification by Foreign Company of Cessation of Business' in case the local branch wants to cease business


Singapore offers multiple methods to close a company depending on its level of indebtedness, tax status, and the state of its liabilities and assets.

Whether you choose to wind up or strike off, the procedures are complicated and time-consuming. There is tons of documentation work, and a number of compliances are also involved. Therefore, it is best to take expert assistance from a professional corporate service provider.

Epica hopes that your business ventures turn out to be lucrative. In case it comes to closing down your business, we will assist you through every step and make sure that the process will become as smooth for you as possible.
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