News
Singapore's
bankruptcy law and corporate insolvency
law are governed by the Bankruptcy
Act (Chapter 20) and the Companies
Act (Chapter 50) respectively.
The
Bankruptcy Act, which came into
force on 15 July 1995, aims to
reduce the instances where parties
resort to bankruptcy proceedings
and encourage the settlement of claims
through voluntary arrangements.
It
simplifies previously cumbersome
and complex procedures, and increases
the
powers of the Official Assignee
to inquire into the bankrupt's affairs
and conduct. It also expedites
discharge
from bankruptcy, particularly through
it's innovative Official Assignee's
certificate of discharge. In 1999,
amendments were made to the Act
to extend the scope and shorten the
time
frame for such discharge by certificate.
In general, amendments to the Act
since 1995 are aimed to make bankruptcy
less
probable, less prohibitive and
less prolonged.
Personal
Insolvency Procedures
Bankruptcy
is commenced only at the instigation
of creditors. It is costly and can
only apply when the debt owed is in
excess of $10 000.
Alternatives to bankruptcy:
- Private Arrangements
-
The debtor may apply to the court to
make a proposal for voluntary arrangements
-
A creditor can seek recovery of a debt
through a court order or judgement
-
Alternative dispute resolution in court
Corporate
Insolvency Procedures
The following are corporate insolvency
procedures available under the Company
Act:
Part VII – Arrangements and reconstruction
Part VIII – Receivers and managers
Part VIIIA – Judicial management
Part X – Winding-Up (Voluntary
and by the court)
Role
played by Government
The
Official Receiver is responsible for
the overall regulation and supervision
of bankruptcy and corporate insolvency
law, and administers the vast majority
of bankruptcy cases and corporate insolvency
in Singapore. The Official Receiver heads
the Insolvency and Public Trustee's Office
within the Ministry of Law.
Role
played by private sector practitioners
Only a handful of bankruptcy cases are
administered by private trustees, either
by a solicitor or a certified public
accountant. Similarly, only in a small
percentage of compulsory liquidation
cases does the court appoint private
liquidators.
Private sector practitioners who act
as liquidators are approved by the Minister
for a three-year period.
Role
played by the Court The
High Court of Singapore has the power to
make a bankruptcy order/winding up order
after considering whether the debtor/company
is in a position to pay the debt. The High
Court also annuls bankruptcy orders and issues
warrants of arrest against bankrupts. The
Subordinate courts hear prosecution proceedings
for alleged bankruptcy offences such as the
non-filing of Statement of Affairs.
Does
the insolvency system in Singapore allow
for:
1.
|
Different
procedures for the insolvency of individuals
and the insolvency of companies? |
|
 |
2.
|
Creditors
to accept an arrangement outside of formal
bankruptcy/liquidation proceedings? |
|
|
3.
|
Priority
payment for employee creditors? |
|
|
4.
|
Priority
payment for taxation debts? |
|
|
5.
|
Automatic
disqualification of directors of failed companies
from managing other companies? |
|
|
6.
|
Recognition
of insolvency proceedings being conducted
in another jurisdiction? |
|
|
7.
|
A
government agency to undertake insolvency
administration work? |
|
|
8.
|
Some
form of licensing of private sector practitioners? |
|
|
9.
|
A
review of the remuneration claimed by an
insolvency practitioner by either a court
or other government regulator? |
|
|
10.
|
A
mandatory scale of fees applicable to insolvency
practitioner remuneration? |
|
|
11.
|
Surveillance
of the work of private sector practitioners
by a government regulator? |
|
|
12.
|
Collation
of insolvency statistics by a government
regulator? |
|
|
|
