At present, the insolvency and restructuring legislative framework for Singapore corporates is provided within the Companies Act. However, personal insolvency matters are dealt with in accordance with Bankruptcy Act.
The IRDA act passed in the parliament on 1st October 2018 and was planned to come into action in the year 2020. This new regulation is intended to work as omnibus legislation that consolidates the personal and corporate insolvency as well as restructuring laws of Singapore into one enactment. Many new provisions and procedures are also added to the list for ease of turnaround and restructuring advisory.
Generally, the liquidation of an insolvent company in the country can be affected by compulsory liquidation or voluntary liquidation initiated by creditors.
The creditors’ voluntary liquidation is generally initiated through company itself while passing a special resolution regarding voluntary liquidation. The company can nominate a person to work as a liquidator. In case of the nomination is rejected by the creditors, they can also choose a liquidator to proceed ahead with formalities. In order to convert creditors’ voluntary liquidation into compulsory liquidation, the application must be sectioned by the Singapore court. On the other side, for compulsory liquidation, the directors or members need to submit an application to the court to lead the winding-up procedure.
In case of restructuring, the creditors or directors of the company can submit an application to Singapore High Court with a request to keep the company under judicial management. The scheme of arrangement can be proposed by the management of the company while responding to the formal insolvency proceedings with reference to the company. However, the shareholders, creditors, and liquidators of the company can submit an application in the Singapore High Court. The court may further order the summoning of creditors and members meeting to consider the scheme of arrangement.
Should you need financial advisory restructuring services?
One should go with the restructuring option only when there is a thorough repayment plan. However, experts always recommend hiring a financial advisory restructuring service provider in the country to proceed ahead with the formalities. The experienced service providers are well aware of the legal practices as per regional and international regulations. They can assist clients with desirable outcomes, even in the most complicated circumstances. The professionals can guide business owners regarding all aspects of rescue, restructuring, and insolvency in business. They can handle the legal formalities with adequate procedures to meet the expectations.
The companies and stakeholders in Singapore need to develop a clear understanding of restructuring and insolvency procedures. When they follow adequate strategies, it gets easier to optimize operations while saving more amount. Hiring a team of experts to handle such operations may give you complete peace of mind, especially when you are already involved in financial hardship. When company restructuring procedures are executed well, they can help you refocus on competitive advantages and growth perspectives. The turnaround and restructuring advisory and the legal experts can help you to complete the process easily.