SINGAPORE - The application period for a programme to help small and micro companies restructure their debts or wind up their businesses has been extended by a year.
The Simplified Insolvency Programme (SIP) will be open for application until July 28, 2022, the Ministry of Law (MinLaw) announced on Monday (July 26).
The initial application period for the programme was for six months ending July 28, 2021.
The extension of the SIP comes as the business environment continues to be challenging for some sectors, even as Singapore transitions towards an endemic Covid-19 situation, MinLaw said.
This is due to an uncertain global outlook and changes to safe management measures to reduce the risk of Covid-19 transmissions locally.
"Micro and small companies that have relied on industry-wide support measures by the Government and financial industry may also face financial headwinds in the coming months as temporary relief measures taper off," MinLaw added.
The SIP consists of two separate programmes which eligible companies can apply for.
One is for the restructuring of debts and the potential rehabilitation of viable businesses, while the other is geared towards orderly winding up of non-viable businesses.
Micro and small companies are defined as having an annual revenue of less than $1 million and $10 million respectively. They account for about 95 per cent of enterprises in Singapore.
To qualify for the SIP, the number of creditors cannot exceed 50 and the number of employees cannot exceed 30.
The company's annual sales turnover must not exceed $10 million and its liabilities, including contingent and prospective liabilities, must not exceed $2 million.
For firms seeking to wind up, the company's realisable unencumbered assets cannot be more than $50,000.
It cannot be a foreign company and it must not be in circumstances that make it unsuitable for the SIP, such as having started or being in other insolvency proceedings.
If accepted into the SIP, micro and small companies and their stakeholders will benefit from simpler, quicker and lower-cost insolvency proceedings, which seek to optimise resources and potentially maximise returns to creditors.