The Insolvency, Restructuring and Dissolution Act of the Singapore government has come into effect from 30th July 2020. This new regulation consolidates various corporate and personal insolvency laws along with the laws related to a debt restructuring that is applicable to companies and individuals as well. Other than this, IRDA also includes the Companies Act and Bankruptcy Act into a single statute. Reports reveal that the old Bankruptcy Act is now repealed, and several provisions of the Companies Act are also deleted from IRDA documentation.
As per the Ministry of Law, 48 different pieces of the subsidiary legislation have also come into effect since 30th July 2020. This new subsidiary legislation focuses on the entities and arrangements that are otherwise excluded in section 440 application. It also works on some elements of judicial management proceedings and creditor scheme moratorium.
The above analysis shows that experts have designed IRDA with a threefold purpose in mind. First of all, it combines the voluntary winding up Singapore, corporate and personal insolvency laws as well as debt restructuring into the same legislation. Secondly, IRDA focuses on the existing restructuring and insolvency laws while strengthening the debt restructuring regime in Singapore. This new legislation is known to add 2017 amendments to the previous companies act, and the newer version introduces several rescue tools along with enhanced access to Singapore’s Insolvency procedures for foreign companies. Lastly, IRDA establishes a heightened regulatory mechanism for Singapore’s insolvency practitioners while opening doors for easy winding up with approved liquidator Singapore assistance. In simple terms, the professionals have now set up a consistent and common standard for all professional regulations while introducing an effective system for accountability.
It is important to mention that Singapore has developed one of the most effective and modern insolvency legislation in Asia. Their main focus is to provide reliable cross-border assistance to the foreign office holders so that they can continue relevant operations with ease. Singapore government has also developed some reliable methods for winding up and company liquidation now. The process of winding up in Singapore should not be mistaken for striking off. These are actually very different procedures; however, both of them help to close operations of a company. A winding-up procedure is easier to follow when the company is solvent, and one can also apply it after the company becomes insolvent.
There are generally two methods for company wind-up in Singapore. One can either consider voluntary winding up Singapore or go ahead with compulsory winding up. When the associated professionals want to go ahead with members’ winding-up procedure, they need to take the consent of all directors first. This liquidation process is mainly followed to pay off all the pending debts of the company. As per recent regulations, the company directors need to organize a meeting for the same, and they need to sign a solvency declaration to proceed ahead. The involved members are further required to select one liquidator to handle the winding-up process in a professional manner. The approved liquidator Singapore can help foreign business owners to close their companies with ease while paying off all the pending debts on time.