Singapore unveils Simplified Insolvency Programme for micro, small companies
Singapore micro and small companies (MSCs), which have been severely impacted by COVID-19 and require support to restructure their debts to rehabilitate their business or wind up may apply for the Simplified Insolvency Programme (SIP) from 29 January 2021, press release by the Ministry of Law said.
The Simplified Insolvency Programme will provide simpler, faster, and lower-cost restructuring and insolvency proceedings for eligible MSCs and complements existing insolvency processes in the Insolvency, Restructuring and Dissolution Act.
The SIP will be available for application for a period of 6 months from 29 January 2021 to 28 July 2021. This period may be further extended should the need arise, according to the press release.
The SIP comprises two separate programmes which eligible MSCs may apply for — Simplified Debt Restructuring Programme (SDRP) for the restructuring of debts and potential rehabilitation of viable businesses; and Simplified Winding Up Programme (SWUP) for the orderly winding up of non-viable businesses.
The SIP will be administered by the Official Receiver, who may assign private insolvency practitioners to administer the MSCs accepted into the SIP.
Besides the SIP, non-corporate businesses may also tap on the Sole Proprietors and Partnerships Scheme administered by Credit Counselling Singapore, as well as the support measures introduced by the Monetary Authority of Singapore to help Small and Medium-sized Enterprises (SMEs) deal with their short term cash flow difficulties.
The SIP forms part of a suite of government measures to help businesses and our workforce emerge stronger from the COVID-19 pandemic. It complements the existing COVID-19 relief measures and legal remedies, including the Re-Align Framework, which allows small and micro businesses to renegotiate their contracts and which commenced on 15 January 2021.
Details of the Simplified Insolvency Programme
Eligibility criteria
1. Annual sales turnover not exceeding $10 million
2. Number of creditors not exceeding 50;
3. Number of employees not exceeding 30;
4. Company liabilities (including contingent and prospective liabilities) not exceeding $2 million;
5. Realisable unencumbered assets not exceeding $50,000 (for SWUP only);
6. The MSC is not a foreign company; and
7. There are no circumstances that make the applicant company unsuitable for the SIP. These circumstances include but are not limited to the company having commenced or being in other insolvency proceedings.
Application Fee
| Applicable Fee | SDRP | SWUP |
| Application fee (to be paid on submission of application | $450 | $450 |
| Administration Fee (to be paid to the OR in the form of deposit on acceptance into the SIP | $18,750 | $2,700 |
| Additional fee such as legal fee, valuation fee, etc | To be borne by the company as incurred | To be borne by the company as incurred |
Companies interested in applying for the SIP may visit https://www.go.gov.sg/sip to learn more
