Extension of Application Period for the Simplified Insolvency Programme
26 Jul 2021 Posted in Press releases
- The Ministry of Law (“MinLaw”) will extend the application period for the Simplified Insolvency Programme (“SIP”) by 12 months, to end on 28 July 2022 instead of the current 28 July 2021.
- The SIP was introduced on 29 January 2021 as an amendment to the Insolvency, Restructuring and Dissolution Act. It aims to help eligible micro and small companies (“MSCs”)1 that face financial difficulties restructure their debts to rehabilitate their business or wind up via simpler, faster and lower cost insolvency processes. The initial application period for entry into the SIP was for six months (i.e. from 29 January 2021 to 28 July 2021).
- Even as Singapore transitions towards an endemic COVID-19 situation, the business environment continues to be challenging for some sectors, due to an uncertain global outlook and changes to safe management measures2 to reduce risk of COVID-19 transmissions in Singapore. MSCs that have relied on industry-wide support measures by the Government and financial industry may also face financial headwinds in the coming months as temporary relief measures taper off.
- Given the challenging environment, MinLaw will extend the application period for the SIP. Financially distressed MSCs, where eligible, may thus continue to apply for the SIP. If accepted, MSCs and their stakeholders will benefit from simpler, faster and lower-cost insolvency proceedings, which seek to optimise resources and potentially maximise returns to creditors.
- The SIP is administered by the Official Receiver and comprises two temporary, bespoke insolvency processes to assist:
a. viable but distressed MSCs to restructure their debts with their creditors via the Simplified Debt Restructuring Programme (“SDRP”); and
b. unviable MSCs to wind up via the Simplified Winding Up Programme (“SWUP”).
- MSCs that wish to apply for the SIP may visit https://www.go.gov.sg/sip.
MINISTRY OF LAW
26 JULY 2021
1. For the purposes of the SIP, micro and small companies (“MSCs”) are defined as companies with an annual sales turnover not exceeding $1 million and $10 million respectively. The SIP is intended to assist locally incorporated MSCs which meet the statutory eligibility criteria to restructure their debts or wind up. ↩
2. Additional measures were recently introduced during Phase 2 (Heightened Alert) and Phase 3 (Heightened Alert). ↩
Last updated on 26 Jul 2021