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Raffles Place, situated at the heart of Singapore's Central Business District, is home to many local and international businesses. Given its commercial significance, companies here sometimes encounter financial difficulties requiring either restructuring or insolvency procedures. Restructuring and insolvency law in Singapore is designed to help companies facing financial distress either rehabilitate their business through restructuring or, when necessary, liquidate assets to distribute among creditors fairly. Singapore has established itself as a leading hub for restructuring matters in Asia, offering modern legal frameworks that provide protection and flexibility to both debtors and creditors.
If your business in Raffles Place is struggling financially or if you are a creditor to a company facing insolvency, engaging a restructuring and insolvency lawyer can be essential. Legal professionals can help navigate complex regulations, assess your options, and safeguard your interests in negotiations or court proceedings. Common situations where legal help is needed include:
Singapore’s restructuring and insolvency framework is mainly governed by the Insolvency, Restructuring and Dissolution Act 2018 (IRDA). The legislation covers personal bankruptcy, corporate insolvency, restructuring mechanisms, and cross-border insolvency proceedings. Notably relevant laws and features include:
Restructuring aims to help a business reorganise its debts and operations to return to profitability, whereas insolvency refers to the inability to pay debts as they fall due, which may ultimately lead to liquidation or winding up.
A court-appointed judicial manager takes over the company's management, assesses the prospects for rehabilitation, and works towards maximising returns for creditors or recommencing normal company operations when possible.
Restructuring and insolvency laws apply to both individuals and companies. For individuals, bankruptcy orders and voluntary arrangements are common mechanisms under local law.
The length of the restructuring process varies. It can range from several months to over a year, depending on the complexity of the case, negotiation dynamics, and court processes.
Generally, directors are not personally liable for company debts. However, if they breach their duties, act fraudulently, or trade while insolvent, they may face personal liability or legal consequences.
Companies undergoing restructuring may receive court-ordered moratoriums, which temporarily prevent creditor actions such as lawsuits, asset seizures, or winding-up applications, allowing time to reorganise.
In liquidation, payment to creditors follows a statutory order of priority. Secured creditors are paid first, followed by preferential creditors (such as employees), unsecured creditors, and finally shareholders if assets remain.
Yes, foreign creditors can participate in Singaporean insolvency proceedings. Singapore’s laws also allow recognition of certain foreign insolvency processes, facilitating cross-border recovery for international creditors.
A scheme of arrangement is a court-approved compromise between a company and its creditors or shareholders, allowing the company to restructure its liabilities with the consent of a majority of stakeholders.
The winding-up process can be initiated voluntarily by shareholders or creditors, or compulsorily through a court order. Legal advice is recommended to determine the most appropriate approach and fulfil all procedural requirements.
For those seeking further assistance or information, the following organisations and bodies in Singapore may be helpful:
If you or your business are facing financial challenges in Raffles Place or require clarity on your rights and obligations, consider the following steps:
Legal advice can make a significant difference in navigating the complexities of restructuring and insolvency. By taking timely and informed action, you can protect your interests and improve the prospects of a favourable outcome.
