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What is winding up

Winding up (or liquidation) is the process by which a company’s assets are collected and sold to pay off its debts. Any monies remaining after all debts, expenses and costs have been paid off are distributed amongst the company's shareholders.

The company will be dissolved and will no longer exist after winding up.

Types of winding up

A company can be wound up in one of these ways:

Compulsory winding up

The court makes an order to wind up a company after a party applies to the court.

The General Division of the High Court hears compulsory winding up applications.

Voluntary winding up

The company's shareholders or creditors pass a resolution to wind up the company. This does not involve the courts.

Note
The following information only applies to compulsory winding up.

Compulsory winding up

The court may wind up a company in any of the circumstances defined in Section 125 of the Insolvency, Restructuring and Dissolution Act (IRDA).

Common situations include:

  • The company is unable to pay its debts. This is deemed to be the case if any of the following applies:
    • The company owes its creditor more than $15,000. Even after the creditor has served a written demand on the company to pay the debt, the company fails to pay or to secure or compound the debt after 3 weeks of the service of the demand.
    • The creditor tries to execute or enforce a judgment against the company but is unable to recover the debt, in whole or in part.
    • A party proves to the court's satisfaction that the company is unable to pay its debts. The court must take into account the contingent and prospective liabilities of the company.
  • The court deems that it is just and equitable to wind up the company. Some examples include but are not limited to:
    • When the company cannot achieve its main objects (purpose for setting up the company).
    • When there is deadlock in the management of the company.

Who can apply for compulsory winding up

Any of the following parties may apply to the court to wind up a company compulsorily:

  • The company itself.
  • Any director of the company.
  • A creditor of the company.
  • A contributory (as defined in Section 4 of the Companies Act).
  • A liquidator of the company.
  • A judicial manager of the company.
  • (If the company is in the banking business) The Monetary Authority of Singapore.
  • A Minister, on grounds specified under the law (1).

Note: In general, a company involved in a compulsory winding up application must be represented by a lawyer, unless it has obtained the court's leave (permission) for an officer to represent the company.

Who is involved

If you file a winding up application, you are the applicant.

  • If the application is filed by the company to be wound up, the company will be the applicant.
  • If the application is not filed by the company to be wound up, the company will be the defendant.

About liquidators

A liquidator will recover and sell the assets of the wound up company and distribute the net proceeds to the company's creditors. A liquidator may be one of the following parties:

  • The Official Receiver, who is a public officer appointed by the court to act as the liquidator of companies undergoing compulsory winding up.
  • A licensed insolvency practitioner.

The roles of a liquidator include:

  • Investigating into the affairs and assets of the company, the conduct of its officers and the claims of creditors and third parties.
  • Recovering and realising the company’s assets in the most advantageous manner to the company.
  • Adjudicating the claims of the creditors to ensure an equitable distribution of the company’s assets in accordance with the IRDA.

Find out more about the liquidator on the Ministry of Law Insolvency Office's website.

Estimated fees

Refer to the Second Schedule of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules for the full list of fees.

Some examples of the fees for a compulsory winding up application include (but are not limited to):

Item or service

Fee

Deposit to the Official Receiver

$10,400

File a winding up application

$75

File an affidavit

  • (Up to 10 pages) $10
  • (More than 10 pages) $1 per page

Note: This table does not include additional fees payable to the LawNet & CrimsonLogic Service Bureau, such as transmission and processing fees for applications filed through the LawNet & CrimsonLogic Service Bureau and its handling fees.

How to file

Follow these steps to apply for compulsory winding up:

You need to pay a $10,400 deposit to the Official Receiver. Email FINANCE@mlaw.gov.sg to request the bank account details and deposit form. You can pay via bank transfer or PayNow.

Refer to the Official Receiver's practice circulars for more information.

After you pay, the Official Receiver will issue a receipt that you will need to submit to the court as part of your winding up application.

File the following documents via eLitigation:

  • An Originating Summons according to either Form CIR-11 or Form CIR-12 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules.
    • If you are the company that is being wound up: Form CIR-11.
    • If you are any party other than the company: Form CIR-12.
    • Include the receipt from the Official Receiver as an attachment to the Originating Summons.
  • A supporting affidavit.

You may choose to file personally or through a lawyer. If you are represented by a lawyer, the documents will be filed by your lawyer. If you are not represented by a lawyer, visit the LawNet & CrimsonLogic Service Bureau to file in person.

When filing your application, you may nominate a licensed insolvency practitioner to be appointed as the liquidator (2).

If the company is the defendant

Where the company is named as the defendant in the application, serve the winding up application on the company at least 7 days before the hearing of your application.

You should also serve the application on the Official Receiver and the nominated licensed insolvency practitioner (if any).

After serving, you must file an Affidavit of Service according to either Form CIR-13 or CIR-14 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules at least 5 days before the hearing of the application.

If the application is filed by the company to be wound up

Where the winding up application is filed by the company, serve the application on the Official Receiver and the nominated licensed insolvency practitioner (if any).

After serving, you must file an Affidavit of Service according to Form CIR-14 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules at least 5 days before the hearing of the application.

At least 7 days before the hearing of your application, you need to do both of the following:

  • Place an advertisement of the notice of the winding up application in an English local daily newspaper or in any other newspaper as directed by the court.
  • Place a notice in the Government Gazette (3).

After you file

The court will usually schedule the hearing of the winding up application within 4 weeks from the date of filing. If you filed through the LawNet & CrimsonLogic Service Bureau, the Service Bureau will inform you to collect a copy of the application documents with the hearing date and time after the court accepts your application documents.

At your hearing

Winding up hearings are usually conducted in open court before a Judge of the General Division of the High Court every Friday.

At the hearing, the court will hear from parties before making a decision.

Possible outcomes

After hearing from the parties, the judge may make the following decisions:

  • Make a winding up order.
  • Dismiss the winding up application.
  • Adjourn the hearing.

When the court issues a winding up order

After the winding up order is made:

  • No action may be started or continued against the company without the court's leave (permission).
  • Any disposition of the company’s property and any transfer of its shares shall be void unless the court orders otherwise.

Refer to the Ministry of Law Insolvency Office's website for more information on how the liquidator will realise and distribute the company's assets.

Need help?

The information here is for general guidance as the courts do not provide legal advice. If you need further help, you may want to get independent legal advice.

Find out more

Resources

Related questions

The payment of the costs of an applicant for the winding up order ranks after the payment of the costs and expenses of winding up (including the remuneration of the liquidator). Therefore, an applicant may not be reimbursed the application costs if there are not enough funds.

You must serve a Notice of Intention to Appear (Form CIR-15 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules) on the applicant. Refer to Rule 70 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules for more information.

You must file an affidavit in opposition via eLitigation, and serve a copy of the affidavit on the applicant at least 5 days before the hearing of the winding up application. Refer to Rule 72 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules.


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