How to Close Business with ACRA: A Guide for Small Business Owners

Closing a business is a significant decision, and doing so correctly is essential to avoid future complications. Whether you’re winding down your operations, shifting to a new venture, or retiring, it’s crucial to follow the necessary steps for closing your business with ACRA (Accounting and Corporate Regulatory Authority) in Singapore. This guide will take you through the key steps to ensure that your business is properly closed in compliance with regulations.

1. Striking Off vs. Liquidation

When closing your business with ACRA, it’s important to choose the right method, depending on your company’s financial situation:

• Striking Off: This process is suited for companies that are inactive, have no debts, and are not involved in legal disputes.
• Liquidation: This method is appropriate for companies with existing liabilities or debts, requiring a more formal process to settle all affairs.

Selecting the correct method for your business closure will ensure that you comply with regulations and avoid unnecessary delays.

2. Striking Off: A Simple Way to Close Your Business

For businesses that are no longer operational and have no outstanding liabilities, striking off is a streamlined and efficient method. Here’s how to go about it:

a. Settle All Outstanding Matters

Before submitting your striking off application to ACRA, ensure the following are in order:

• Tax Compliance: Submit your final tax returns and clear any outstanding tax obligations with the Inland Revenue Authority of Singapore (IRAS).
• Settling Liabilities: Ensure all debts and obligations to government agencies, such as CPF and GST, are resolved.
• File All Returns: Submit any overdue annual returns with ACRA.

Once these steps are completed, you can proceed with your application for striking off.

b. Submit Your Application Online

ACRA’s BizFile+ portal allows you to submit your striking off application. The online submission process is simple and quick.

c. Wait for Approval

After ACRA reviews your application, it usually takes around 2-3 months for approval. If everything is in order, your company will be officially struck off the register.

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3. Liquidation: A Formal Process for Businesses with Liabilities

If your business has debts or other outstanding liabilities, liquidation is necessary. It’s a more formal process, and here’s what you need to do:

• Appoint a Liquidator: A licensed liquidator will take over the company’s affairs and oversee the sale of assets, debt settlements, and the distribution of remaining funds.
• File for Liquidation: The liquidator will file the necessary documents with ACRA to start the liquidation process, which involves a thorough evaluation of the company’s financial standing.
• Complete the Liquidation Process: Once liquidation is complete, the liquidator will file a final report with ACRA, and the company will be deregistered from ACRA’s register.

4. Final Steps After Closing with ACRA

Once your business is officially closed with ACRA, there are still a few administrative tasks to complete:

• Notify IRAS: Let the Inland Revenue Authority of Singapore know about your business closure and file your final tax return.
• Close Bank Accounts: Ensure that all business-related bank accounts are closed and that any final payments are settled.
• Cancel Licenses and Permits: If your business held any licenses or permits, make sure to cancel them with the relevant authorities.
• Stop CPF Contributions: Notify the Central Provident Fund (CPF) to stop employee contributions if applicable.

5. Retain Business Records for Future Reference

Even after your business is closed, it’s important to retain all relevant records for at least five years. This will be helpful in case of any future audits or legal inquiries.

Summary

Closing a business with ACRA is a critical process that requires careful planning and compliance with the necessary regulations. Whether you opt for striking off or liquidation, it’s important to follow the correct steps to ensure your business is officially closed without complications. If you’re uncertain about any aspect of the closure process, seeking expert advice can help streamline the journey.

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