How do Strike Off a Singapore Company?

Striking Off / Deregistration

The Companies Act allows the ACRA strike a company off the Register if there is reasonable cause to believe that a company has ceased operation.

Conditions for striking off

The ACRA will strike a company off the Register only if the company can meet the following conditions:

• The company has ceased operation;
• The company is not and will not be involved in any court proceedings, whether in or outside Singapore;
• The company has no assets and liabilities;
• The company has no outstanding penalties or offers of composition owing to ACRA and not indebted to other government departments; the company has no outstanding tax liabilities owing to the Inland Revenue Authority of Singapore (“IRAS”);
• The company has no outstanding charges in its charge register eg. no mortgages etc.;
• none of the officers of the company have outstanding ACRA summonses.

If the application is approved

• a “striking-off notice” will be sent to the company at its registered office address, its directors at their residential address and IRAS, within 14 days of the receipt of the application;
• A period of 1 month is given in the “striking-off notice” to anyone that may wish to raise any objection to application;
• After the 1 month period has expired, a notification of the intention to strike this company off the Register 3 months later will be made in the Government Gazette. Any interested person can still raise an objection to the application during this 3 months;
• After the 3 months have expired, a final notification will be made stating that the company has been struck off the Register. The date that the company is struck off will also be stated in the final notification.

The entire striking off process will therefore take about 5 months.

If the application is NOT approved

If the application is not approved, for example, the documents submitted are incomplete or there are still outstanding assets and liabilities etc, the application will be returned to the applicant so that the necessary changes can be made or action taken. The application can then be re-submitted for our consideration again.

Click here for more information on Rikvin’s Comany Registration Services

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No matter what stage of life your business is in, you’ll need an experienced accountant not only to prepare your taxes, but also to help you plan your long-term financial goals.

A good small-business accountant understands and keeps you updated on latest tax laws, but should also know enough about your business to become a vital member of your advisory team. Your accountant should be consulted before you buy any equipment, sign a major deal, sell or relocate your business.

But how do you find the right accountant for your small business?

If possible, look for someone with experience in your specific industry. If you are in the apparel business, you want someone who knows fashion. If you are in the construction industry, you want someone who knows the ins and outs of leasing heavy equipment and dealing with subcontractors.

The best way to find a good accountant is through word-of-mouth; start by asking your friends, neighbors, and business associates for recommendations.

Remember, in order to do a good job your accountant has to know nearly everything about you, your family and your business. This is why it’s essential to find someone you feel comfortable talking with. They should not only be competent, but also have good chemistry with you and your staff.

Once you assemble a list of potential candidates, call their offices and ask someone there to send you a company profile, brochure, or other written material. When the package arrives, study it. Is the material clear and well presented? Is the cover letter neatly typed? You want to make sure the firm makes a positive first impression, because they are representing you and your company to the IRAS and to the rest of the business world.

If the package looks good, call and make an appointment to meet with someone at the firm.

Many entrepreneurs prefer to work with small accounting firms because they are more likely to work directly with a partner or principal. But if your business requires a big company with international offices, don’t be afraid to go with a Big Six firm. Schedule at least an hour for an initial visit. If the person says they plan to charge you for the get-acquainted meeting, cancel it. A reputable accountant will meet with prospective clients at no charge.

Make a list of questions you want to ask during your interview. Sit back and listen to what they say. Ask yourself if you feel comfortable talking with the person. Remember, you will be sharing very personal financial information.

Some of the questions that you may want to ask are:

• What is the charge for specific projects and services?
• Who, specifically, at the firm will do the hands-on accounting and tax preparation? Can an introduction with that person be arranged?
• How does the firm expect information to be provided to them? By fax? On disk? In person? Via e-mail?
• When, specifically, does the firm need the information?
• Can the firm represent my company in a dispute with the Tax ?

How does the firm expect to be paid? Remember, if things don’t work out, don’t be afraid to change accountants. There are many firms out there who would be happy to have your business.

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In news report published in the Straits Time on Thursday, 8th October, 2009, these SMEs are not familiar with the tax exemptions and concessionary schemes and therefore lose out savings on tax rate. (Click here for more info)

About 200,000 companies are incorporated in Singapore every year. As part of the measures to promote entrepreneurial growth, the Singapore authorities have introduced various tax exemptions and schemes. The latest tax exemption benefit allows new start-ups a tax exemption on the first S$100,000 of taxable income for each of the first three tax-filing years. Another measure was introduced to help improve cash flow for companies by allowing them to carry any trade losses of up to S$200,000 to the previous three years for a tax refund.

Mr Lawrence Leow, president of the Association of Small and Medium Enterprises (Asme), remarked that there has been a lack of awareness with tax schemes and incentives available to SMEs. He said that ASME will consider working with IRAS to educate more corporate taxpayers on these schemes.

Rikvin has been helping entrepreneurs around the world and locally to incorporate start-ups in Singapore since 1998. As part of our comprehensive accounting and tax services, we help our clients stay current on tax savings available to them. Our accounting specialists are also available to advice to clients on the various exemptions and schemes that would benefit their businesses.

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Tip 1: Private expenses are not deductible

If you are a director of a company, do take note that your private expenses arising from entertainment, vacation and personal purposes are not allowable for tax deduction. These private expenses should be segregated and excluded from your claims in Form C.

Examples of such private expenses:

• Monthly subscriptions to country clubs
• Personal dining or shopping bills
• Family trips overseas

Tip 2: Some expenses are not deductible

There are certain expenses which you cannot claim as deductions even if you had incurred them for business purposes. One example is motor vehicle expenses for private-plate cars (i.e. non-Q plate cars) and business passenger vehicles (Q-plate cars) registered on or after 1 Apr 1998.

These motor vehicle expenses include petrol, insurance, parking fees, ERP charges, hire purchase interest, etc.

Tip 3: Remuneration expenses in respect of employed family members must match services performed

For family owned companies, if you have family members (for example parents, spouse, children and siblings) working for you, the amount of remuneration claimed as tax deductible expenses must match the actual services they perform.

The salary expenses claimed should be comparable to that of an independent employee with the same qualifications and experience, performing the same services. Excessive amounts should therefore be added back in the tax computation.

If your family member is no longer involved in the operations of the company, he/she cannot be considered as an employee. We have a case study below to illustrate this.

Madam A and her son, Mr B are the only shareholders and directors of ABC Pte Ltd. However Mr B had migrated overseas some years ago and is no longer involved in the day-to-day running of the company. As such, the company should no longer be paying any remuneration to Mr B and should not claim directors’ fees/ remuneration for Mr B.

Voluntary disclosure

If you have discovered any filing errors made for back years, we encourage you to come forward and disclose them voluntarily. For such cases, the offences can be compounded at reduced penalty rates.

For more help

To find out more about Form C filing, visit our website www.iras.gov.sg

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Deadline to file company tax returns (Form C)

The Form C has to be submitted by July every year for the preceding FYE unless an ECI (Estimated Chargeable Income) had been submitted within three months after the end of its accounting period which will then give the company an extension until December.

Tax and Annual Returns for dormant company

Submission of Annual Returns with ACRA

A dormant company is required to submit its set of accounts and returns annually to ACRA, despite the fact that it is not engaged in any form of business activity. The dormant company is given leave from preparing a full-length set of accounts and may present brief but acceptable financial statements that are not necessarily audited.

Submission of Tax Returns with Tax Authorities

If the company is dormant and has no income in the preceding year, and does not have unutilized loss brought forward from a previous year of assessment, the company can do the following:

• E-filing Form C using the Form C Template for Dormant Company
• Completing and submitting only page 1 of the Form C together with the audited accounts. Otherwise, you need to complete the relevant sections of Form C as specified in the Explanatory Notes to Form C and submit all 5 pages of the Form to IRAS.
• Alternatively, your company may apply for waiver to file the Form C via an application form: Application For Waiver To Submit Income Tax Return (Form C) By A Dormant Company.
• If the application is approved, the company will not be issued Form C in future. However, if the company re-commences business or is in receipt of any income or pays dividends, the company has to notify IRAS in writing.

Consequences for a delay in filing the documents

If a director fails to supply the above documentation within the time limit, he may be prosecuted, as it is a criminal offence to delay or avoid the filing of records. If the Registrar believes that the company is no longer carrying on its business, the name could be struck off the register and dissolved.

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• Goods and Services Tax (GST) is a tax charged on the supply of goods and services made in Singapore and on the importation of goods into Singapore.
• The current rate is 5% (from 1 January 2004). The rate will be increased to 7% from 1 July 2007.

You must register:

• At the end of a quarter if your taxable supplies exceed S$1 million for a quarter and the immediate past 3 quarters. Quarter refers to March, June. September or December; or
• At any time if your taxable supplies are expected to exceed S$1 million for the next 12 months.
• You can choose to register for GST on voluntary basis (to claim back for GST paid)

What Goods And Services Are Subject To GST?

• All goods and services are taxable and known as taxable supplies.
• However, some items are specifically exempt from GST by law. Exempted items include financial services and the sale or lease of residential properties.

When is it Compulsory to Register?

• Your business must be registered to collect GST if your annual turnover exceeds or is likely to exceed S$1 million from the sale of taxable goods and services.
• This requirement may be waived if most of your goods or services are exported or supplied internationally (“zero-rated supplies”).

Can I Choose To Register?

• You may also apply to the Comptroller of GST to collect GST voluntarily. Approval for voluntary registration is at the discretion of the Comptroller.
• Once approval is given, you must remain registered for at least two years.

Why Should I Register?

• Most businesses register for GST to claim back the GST incurred on their business purchases.
• When GST paid exceeds GST collected, the difference can be claimed from IRAS as a GST refund.
• When GST collected exceeds GST paid, you have to pay the difference to IRAS.
• When GST rate increase, it may make business sense to voluntarily register to collect GST in order to claim back GST incurred on business purchases.

Who Can Register?

• Sole proprietorships
• Partnerships
• Limited liability partnerships
• Companies
• Clubs, associations, management corporations or organizations
• Non-profit organizations
• Statutory boards
• Government bodies

Are There Any GST Schemes To Help Businesses?

To create a pro-enterprise environment, the Government has several assistance schemes relating to GST. These schemes generally help to ease the cash flow for businesses.

Goods and Services Tax (GST) Assistance Scheme

Get a grant to lower the costs involved in becoming a GST-registered trader. GST traders can collect GST and claim back for GST paid to suppliers.

Major Exporter Scheme (MES)

Major exporters can improve their cash flow by deferring GST payments on goods imported mainly for re-export out of Singapore.

Licensed Warehouse Scheme

Transform your warehouse into a licensed warehouse for storing dutiable goods. In licensed warehouses, duty and Goods and Services Tax (GST) are suspended until the goods are released for sale into Singapore.

Zero GST Warehouse Scheme (ZGS)

Businesses can transform their warehouses into zero-GST warehouses to minimise red tape and bypass the Goods and Services Tax (GST) process.

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