Final Extension of Application Period for the Simplified Insolvency Programme
28 Jul 2022 Posted in Press releases
1. The Ministry of Law (“MinLaw”) will extend the application period for the Simplified Insolvency Programme (“SIP”)1 by 18 months, to end on 28 January 2024 instead of the current 28 July 2022. This will be the final such extension.
2. The SIP was introduced on 29 January 2021 to help eligible micro and small companies (“MSCs”)2 that face financial difficulties restructure their debts to rehabilitate their business, or wind up via a simpler, faster and lower cost insolvency process.
3. The SIP is administered by the Official Receiver and comprises two separate 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”).
5. Even as Singapore progresses towards living with COVID-19, the business environment continues to be challenging due to various geo-political events and the persistent uncertain global economic outlook. The resulting economic headwinds from rising inflation, rising interest rates and supply chain disruptions continue to place pressure on MSCs that are still in their initial stages of recovery after the gradual reopening of the borders on 1 April 2022.
6. Given the challenging environment, a final5 extension for the application period for the SIP to 28 January 2024 will allow eligible financially distressed MSCs to continue applying for the SIP. If accepted for the SIP, MSCs and their stakeholders will benefit from simpler, faster and lower cost debt restructuring and/or insolvency processes, which seek to optimise resources and potentially maximise returns to creditors.
7. MSCs that wish to apply for the SIP may visit www.go.gov.sg/sip.
2. For the purposes of the SIP, MSCs are defined as micro and small 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.↩
3. The application period of 6 months was prescribed in the Insolvency, Restructuring and Dissolution (Prescribed Periods For Parts 5A and 10A) Order 2021 pursuant to s. 72B(2) and s. 250B(2) of the IRDA, which provide that the Minister may prescribe an application period not exceeding 6 months for the SDRP and SWUP, respectively.↩
4. The Insolvency, Restructuring and Dissolution (Extension of Prescribed Periods for Parts 5A and 10A) Order 2021 provides that for the purposes of Parts 5A and 10A of the IRDA, the prescribed period is extended for 12 months starting on 29 July 2021 and which period will end on 28 July 2022. Refer to Insolvency, Restructuring and Dissolution (Extension of Prescribed Periods for Parts 5A and 10A) Order 2021 - S 550/2021.↩
5. Under s. 72B(3) and s. 250B(3) of the IRDA, which relate to the SDRP and SWUP respectively, provide that the Minister “_may, by order in the Gazette, extend or shorten the prescribed period for or by a period determined by the Minister, and the period may be extended or shortened more than once_”. The extension of the prescribed application period for the SIP is subject to s. 72B(1) and 250B(1) of the IRDA, which provides that the SIP provisions in the IRDA continues in force for a period of 3 years beginning on the date of commencement of the SIP provisions (i.e. the SIP provisions will be in force until 28 January 2024).↩
MINISTRY OF LAW
28 JULY 2022
Last updated on 28 Jul 2022