The Singapore Government has implemented revisions to the Simplified Insolvency Programme (SIP), specifically affecting the Simplified Liquidation Programme (SLP) administered by the Insolvency and Public Trustee’s Office under the oversight of the Ministry of Law.
The revisions refine eligibility parameters, strengthen governance safeguards, and clarify administrative procedures to ensure the programme remains targeted at genuinely small and straightforward insolvencies.
Below is a focused summary of the key revisions.
- Programme Extension and Continuation
Originally introduced as a temporary COVID-19 relief measure, the SLP has been extended beyond its initial sunset period. This reflects the Government’s view that a streamlined liquidation pathway remains necessary for micro and small enterprises (MSEs).
The extension confirms the SLP as a continuing simplified alternative to a standard creditors’ voluntary liquidation under the Insolvency, Restructuring and Dissolution Act 2018 (IRDA).
- Refined Eligibility Thresholds
The S$2 million total liabilities cap remains in place. However, assessment criteria have been tightened to ensure:
- Companies with complex asset structures are excluded
- Cases involving significant related-party transactions receive closer scrutiny
- Companies with incomplete accounting records may be rejected
The revision reinforces that SLP is strictly for simple, low-asset, low-liability cases.
- Enhanced Screening and Safeguards
IPTO has strengthened its screening process before approving entry into SLP. Key areas of review now include:
- Antecedent transactions (e.g. undervalue transactions, unfair preferences)
- Director conduct prior to insolvency
- Asset dissipation risk
- Ongoing or threatened litigation
Where material concerns arise, companies may be directed to proceed under a standard liquidation route instead.
- Clarification of Director Responsibilities
The revisions emphasise that simplified procedure does not reduce statutory duties. Directors remain fully subject to:
- Wrongful trading provisions
- Record-keeping requirements
- Fiduciary obligations
Failure to comply may result in investigation or personal liability, even if the company enters SLP.
- Administrative Streamlining Maintained
While governance has been strengthened, the core objectives of SLP remain unchanged:
- Streamlined reporting
- Reduced procedural steps
- Lower liquidation costs
- Faster case completion timeline
This ensures that small companies with limited estates are not disproportionately burdened by liquidation expenses.
Practical Implications
The revised framework signals a shift from pandemic relief to structured, risk-managed simplified insolvency.
Companies considering SLP should now expect:
- More rigorous upfront review
- Greater scrutiny of financial records
- Less tolerance for governance deficiencies
Early professional assessment is advisable to determine suitability before application.