Oon & Bazul LLP (“Oon & Bazul”), Singapore’s largest conflict-free law firm and leading commercial legal practice, would like to share its latest analysis and insight authored by Meiyen Tan – Head, and Keith Han – Partner, Restructuring and Insolvency:
On 23 July 2020, the Ministry of Law announced that the Insolvency, Restructuring and Dissolution Act (the “IRDA”), together with its 48 related pieces of subsidiary legislation, will come into force on 30 July 2020.
Previously under the Bankruptcy Act (“BA”) and Companies Act (“CA”), different qualifying requirements applied for individuals to practice as insolvency officeholders and licensing was managed by various organisations. The IRDA consolidates these by establishing a new licensing regime for insolvency practitioners under the purview of the Official Receiver. Besides prescribing the requirements to obtain an Insolvency Practitioner’s License (“IPL”), this licensing regime will also establish and regulate the standards of professional conduct for insolvency officeholders.
Under the IRDA, IPL is required to take up appointments as an insolvency officeholder. An IPL will be granted by the Official Receiver upon successful application.
We set out below a summary of the provisions in the IRDA on
(a) the type of insolvency work requiring an IPL; (b) the qualifications to apply for an IPL;
- the application procedure; and
- the transitional
Under the IRDA, an IPL is required to take up insolvency officeholder appointments except in members’ voluntary liquidations and schemes of arrangements. Until the Minister prescribes any other qualifications, only solicitors, public accountants and chartered accountants may apply for an IPL. An applicant must be ‘fit and proper’ and also have relevant work experience. The application for an IPL and the supporting documents can be submitted online. If successful, an IPL will be granted by the Official Receiver and will remain in force until 30 June of the third year following the application. Insolvency procedures and appointments commenced prior to 30 July 2020 continue to be governed by the BA and CA. Until 30 January 2021, an IPL applicant may continue to undertake work until his application is granted or rejected.
a) Insolvency Work requiring an IPL
Under sections 47 and 48 of the IRDA, an IPL is required to undertake insolvency officeholder appointments in
- liquidations (except in a members’ voluntary winding up case);
- judicial managements;
- bankruptcies; and
- voluntary arrangements.
However, an IPL is not required to
- act as a liquidator in a members’ voluntary winding up case (IRDA s 47(2)(b));
- act as a scheme manager in a scheme of arrangement (IRDA s 47(2)(c)); or
administer insolvency or debt restructuring cases previously commenced under the BA or CA (see IRDA ss 525 and 526).
a) Qualifications for an IPL
Under section 50 of the IRDA, the following persons are qualified to hold or be granted an IPL:
- public accountants (as registered according to the Accountants Act);
- chartered accounts (as registered according to the Singapore Accountancy Commission Act); and
- individuals with qualifications specified in the
Relevant Work Experience
In order to qualify for an IPL, an applicant must also have relevant work experience by satisfying one of the following:
- having acted as an insolvency practitioner in relation to a corporation or an individual under Singapore law;
- having assisted such a person, for a minimum of 3 continuous years, of which 2 years must be at a supervisory level; or
- having acted as a solicitor for a creditor or a debtor in relation to a bankruptcy application or an administration of any bankruptcy under Singapore law within the last 3 years before the date of application.
Fit and Proper
Under section 51(8) of the IRDA, in determining if an individual is a “fit and proper person”, the licensing officer may take into account:
- any prior conviction of any offence involving fraud, dishonesty or moral turpitude;
- any prior judgment entered against the individual in civil proceedings that involves a finding of fraud, dishonesty or breach of fiduciary duty on the part of the individual;
- whether the individual is or was suffering from a mental disorder;
- whether the individual is an undischarged bankrupt or has entered into a composition or scheme of arrangement with the creditors of the individual;
- whether the individual has had a licence revoked by the licensing officer
Further details on what is deemed relevant work experience and “fit and proper” can be found in the MinLaw website.
b) Application Procedure
Section 51 of the IRDA governs the procedure for an application for an IPL.
The application procedure can be completed via the Government’s GoBusiness Licensing Platform, and the following documents are required:
- Curriculum Vitae;
- Evidence that the applicant is a qualified person (under IRDA s 50(2)); Proof of Professional Membership in the professional bodies relating to the applicant’s qualification (e.g. LawSoc or ISCA);
- Proof of relevant work experience (e.g. liquidator’s ACRA licence, copies of orders of court or resolutions demonstrating appointment as insolvency practitioner).
Once successfully obtained, under IRDA s 53, an IPL remains in force until 30 June in the third year following the year it was granted.
For further details on the application procedure, please see the MinLaw website which can be accessed here. MinLaw has also provided a step-by-step guide on applying for an IPL.
c) Transitional Provisions
Insolvency Procedures Commenced Under the BA & CA
Insolvency procedures and appointments applied for before 30 July 2020 will continue to be governed
by the BA and CA, despite the IRDA coming into force. The procedures and appointments under the BA and CA which are affected by this transitional provision are set out in sections 525 and 526 of the IRDA.
Insolvency Procedures Commenced under the IRDA Section 527(1) of the IRDA provides that an IPL applicant may continue to undertake work without holding an IPL until his application is granted or rejected up till 30 January 2021. Such work an applicant may undertake during the transitional period must correspond to his qualification under the BA and the CA:
- Approved liquidators (registered with ACRA) may only act as liquidators, provisional liquidators and receivers commenced under the
- Public Accountants may only act as judicial managers, trustees for bankruptcy cases, and nominees in voluntary arrangements commenced under the
- Solicitors may act as trustees for bankruptcy cases, and nominees in voluntary arrangements commenced under the
If you require assistance for any Restructuring and Insolvency matters, please do not hesitate to get in touch with Meiyen Tan via [email protected] or (+65) 6239 5898; or Keith Han via [email protected] or (+65) 6704 1903.