The winding-up of companies in Singapore occurs when either the company is unable to pay its debts or it is decided that the business should be dissolved. When a company goes into liquidation, all of its assets are sold and used to repay as much as possible of the money owed by the company.
A court must order a winding up lawyer in singapore if shareholders pass a special resolution resolving to wind up a company. A court can also appoint an Official Assignee under Section 282 of the Companies Act 2006 for compulsory winding up, which means that shareholders do not have an option but to wind up their company. In addition, if a creditor has obtained judgement from the Court against the debtor then they may apply for the winding up order with or without the winding up petition.
It is not possible to go into liquidation without the leave of the court; however, it is possible for a company to be “de-registered” (i.e., struck off) which means that the company’s name could become available for other companies to register in its place. This usually happens when a company ceases business or has failed to file an Annual Return with ACRA for more than 1 year. For example, if you wanted to start your own motor insurance brokerage business, you would need to use another name because you couldn’t use ‘Nationwide Insurance Brokers’ as that name may already be registered with ACRAs database (because they probably filed an Annual Return). One can get around this by deregistering and re-registering a new company name. Hence the winding up is usually not “terminal” for a company as it can always be deregistered, and then restart with an alternative business name.
Meanwhile, there is no such thing as ‘winding up of a sole trader’. If you’re still running your own business but has no staff, i.e., just you and you alone who works in the office, then technically speaking, one cannot really declare oneself as being wound up – which means that we don’t see ‘Winding Up Petition against Sole Trader’ on ACRA (although they do happen and I’ve seen one before).
To wind up a Company: An application to Court for a winding up order must be made by petition to the court. The petition must contain the following information:
1) The number and class of shares in respect of which each petitioner is entitled to vote at a meeting of members;
2) A statement that the petitioner believes that the company will be unable to pay its debts or that there are circumstances indicating that it is just and equitable that the company should be wound up;
3) Where the application is made pursuant to section 290(1)(e), a statement as to how many creditors have proved their debts and how many objections (if any) were filed against liquidation and, where appropriate, how any such objections were disposed of (see sections 292(5), 293(2) and 294(3));
4) Where the application is made pursuant to section 290(1)(f), a statement of all disputed claims under Part IV or unasserted claims under Part V;
5) Where the petition is presented by several creditors, it must also state whether they are acting jointly or separately;
6) The address for service of the petitioner on which process may be served in relation to any proceedings.
Where the company has not commenced business, no winding up order can be made unless there are at least three members (see section 278). The application for an order must be supported by an affidavit.