The main laws governing insolvent companies are the Singapore Companies Act and the Bankruptcy Law. While Chapter 50 in the Commercial Law provides for corporate insolvency, the Bankruptcy Act sets out the legal means for the personal insolvency procedures. However, certain aspects of the Companies Act related to the judicial management and insolvency of companies have been imported into the Singapore Bankruptcy Law and can be enforced on corporate debtors.
With years of experience in restructuring and insolvency matters, our Singapore lawyers can provide you more information about the applicable legislation on insolvency.
Insolvency refers to a Singapore company’s incapacity to pay its debts. Under the new Insolvency Act, businesses unable to liquidate any outstanding amount must pass a “proof of debt” which implies a test that shows the company cannot pay the debts. Companies in Singapore can remain in a state of insolvency during 3 years, period after which compulsory or voluntary liquidation can be commenced.
Insolvent companies can appoint a receiver which will be in charge with drafting a plan in order to pay the creditors in order to avoid bankruptcy or liquidation. The plan can include voluntary agreements or between the creditors and the debtor or repayment schemes.
There is no need to conclude a contract with the receiver and no judicial order is required in case of insolvency in Singapore.
Our insolvency attorneys in Singapore can provide you with information about the steps to be followed in any of the procedures above.
A company facing financial difficulties can first choose restructuring solutions before starting the insolvency procedure. There are two main types of restructuring a Singapore company can appeal to:
Corporate restructuring can be achieved by making a scheme of arrangement or by judicial management. Our law firm in Singapore can help you draft a restructuring plan for you company, if it struggles with financial problems.
For complete information about the solutions available for company insolvency and restructuring, do not hesitate to contact our insolvency lawyers in Singapore.
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