Simplified insolvency programme available for micro, small firms from Jan 29

MICRO and small companies severely impacted by Covid-19 and in need of help to restructure their debts to rehabilitate their business or wind up may apply for a Simplified Insolvency Programme (SIP) starting Jan 29.

The SIP will be available for six months until July 28 and may extend further if the need arises, Singapore's Ministry of Law (MinLaw) said on Thursday.

It comprises two separate programmes. The first is the Simplified Debt Restructuring Programme (SDRP) for the restructuring of debts and potential rehabilitation of viable businesses. The other is the Simplified Winding Up Programme (SWUP) for the orderly winding up of non-viable businesses.

To qualify for the SIP, micro and small firms must must have an annual sales turnover not exceeding S$10 million. The number of creditors cannot exceed 50, and the number of employees must not be more than 30.

Company liabilities - including contingent and prospective liabilities - must not exceed S$2 million. The firm cannot be a foreign company and there must not be any circumstances that make the applicant company unsuitable for the SIP. Circumstances include the company having commenced or being in other insolvency proceedings.

For the SWUP, realisable unencumbered assets cannot be more than S$50,000.

The application fee for both the SDRP and SWUP is S$450, while the administration fee will be S$18,750 and S$2,700 respectively. Fees for additional services such as legal advice and valuation will need to be borne by the firm.

Besides the SIP, MinLaw said non-corporate businesses may also tap the Sole Proprietors Scheme and Partnerships Scheme administered by Credit Counselling Singapore. They can also consider the support measures introduced by the Monetary Authority of Singapore to help small and medium-sized enterprises deal with short-term cash flow difficulties.