Eligible micro and small companies severely impacted by Covid-19 can apply for help with debt restructuring, business rehabilitation or orderly winding up.
Singapore has launched a Simplified Insolvency Programme (SIP), allowing micro and small companies severely impacted by Covid-19 to restructure their debts or wind up with a simpler, faster, and lower-cost approach.
The SIP was introduced in the Insolvency, Restructuring and Dissolution (Amendment) Act 2020, passed in Parliament on 3 November 2020.
Launched on 29 January, the SIP is available for eligible micro and small companies to apply until 28 July 2021, and may be extended further if the need arises.
To be eligible, companies should have annual sales under SGD 10 million, fewer than 50 creditors, fewer than 30 employees, and liabilities under SGD 2 million.
Two SIP programmes are provided: a Simplified Debt Restructuring Programme for debt restructuring and business rehabilitation; and a Simplified Winding Up Programme for the orderly winding up of non-viable businesses.
The SIP will be administered by Singapore’s Official Receiver, which may assign private insolvency practitioners to administer micro and small companies accepted into the programme.
The SIP is not available to foreign companies, i.e. any company, corporation, society, association or other body that is incorporated outside of Singapore.
“The SIP forms part of a suite of Government measures to help businesses and our workforce emerge stronger from the Covid-19 pandemic,” the Ministry of Law said in a statement.
It complements the existing Covid-19 relief measures and legal remedies, including the Re-Align Framework, which allows micro and small businesses to renegotiate their contracts and which commenced on 15 January 2021.
Non-corporate businesses may also tap the Sole Proprietors Scheme and Partnerships Scheme administered by Credit Counselling Singapore, and consider support measures introduced by the MAS (Monetary Authority of Singapore) to help small and medium-sized enterprises deal with short-term cash flow difficulties.
More information about the SIP is available here.