The main legislation governing bankruptcy procedures in Singapore is the Bankruptcy Act of 1995. The Bankruptcy Act was amended at the end 2010 when insolvency procedures were revised. The current Singapore Companies Act stipulates the provisions for corporate insolvency, liquidation and judicial management procedures, while the Bankruptcy Act only provides for individual bankruptcy. Singapore companies may be liquidated voluntarily or by the order of the Supreme Court. Bankruptcy proceedings may be commenced by submitting a bankruptcy petition with the High Court by the debtor or by a creditor. The minimum threshold for starting bankruptcy procedures in Singapore is 10,000 SGD.
Voluntary bankruptcy procedures usually start when the debtor submits the petition him or herself. The debtor must also submit a statement of affairs. In the case of Singapore companies or partnerships, the bankruptcy petition must be submitted by all the partners of the company. A new provision of the Bankruptcy Act stipulates a debt repayment scheme. The debtor may also appeal to arbitration proceedings in bankruptcy cases. In order to arrange amicable bankruptcy procedures Singapore companies must submit an interim order to stop other proceedings against it. The application will also contain a proposal stating all the company’s assets and liabilities and a plan for repaying these debts. The company must also appoint a nominee to supervise the debt. The nominee must be a registered public accountant or a lawyer.
Bankruptcy proceedings in Singapore may also be commenced by the creditor once a creditor’s petition is submitted with the High Court. However, the creditor must first send a statutory demand to the Singapore company. If the payment is not made within 21 days from receiving the demand, the creditor may proceed with the petition. Once the bankruptcy order is issued by the Court, the company will be declared bankrupt in approximately 6 weeks. Once the Singapore company is declared bankrupt, an official assignee by the Court will handle the company’s debts.
For complete information about bankruptcy proceedings you may refer to our experts in opening companies in Singapore.