Can a director be personally liable for company debts if we keep trading while insolvent in Singapore?

Yes, potentially. In Singapore, a director is not automatically personally liable merely because the company is insolvent. But personal exposure can arise if the company keeps incurring debts when there is no reasonable prospect of meeting them in full, and the director was knowingly a party to that conduct. Singapore law also separately targets fraudulent trading, where business is carried on with intent to defraud creditors or for a fraudulent purpose.

The practical distinction is this: if the business is still genuinely rescuable, you should move early into a restructuring route, not continue trading in the ordinary way and hope cash flow recovers later. Under the IRDA, Singapore provides court-supervised rescue tools such as schemes of arrangement with moratorium protection, and judicial management, which is aimed at survival of the company or a more advantageous realisation than an immediate winding up.

For smaller businesses, this is especially important now because the Simplified Insolvency Programme 2.0 is a permanent part of the framework. It includes a Simplified Debt Restructuring Programme for viable small companies and a Simplified Winding Up Programme for non-viable ones. The official FAQ states that SDRP is for restructuring debts and rehabilitating viable businesses, while SWUP is for orderly winding up of non-viable businesses, and SDRP eligibility includes a liabilities cap of S$2 million.

On the facts you described, the real risk point is continuing to take on fresh supplier credit, customer money, or other liabilities when the company has no reasonable basis to think those obligations can be met. If that line has already been crossed, the question is no longer just commercial, it becomes a director-liability issue. Singapore law even allows the company or an interested party to seek a court declaration that a proposed transaction or course of conduct would not amount to wrongful trading, which shows how seriously this risk is treated.

What should happen next: do an immediate insolvency review, freeze any new commitments that cannot realistically be paid, preserve the company’s records and board decision trail, and decide quickly between a rescue filing and an orderly wind-up. Waiting too long is usually what turns a company problem into a director problem.