As an Insolvency Practitioner
As an Insolvency Practitioner
Under the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”), an insolvency practitioner’s licence is required if a person wishes to undertake the following appointment(s):
- Liquidator or provisional liquidator of the corporation;
- Judicial manager or interim judicial manager of the corporation;
- Receiver or manager of the property of the corporation (being a company);
- Receiver or manager of the property in Singapore of a corporation (not being a company);
- Trustee of a bankrupt’s estate; or
- Nominee of a voluntary arrangement.
Section 48(1) of the IRDA prohibits any person from acting as an insolvency practitioner in relation to a corporation or an individual, or advertising, or in any way holding out, that he or she is willing to act as an insolvency practitioner in relation to a corporation or an individual without a licence. Any person found contravening or acting to the contrary shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months or to both.
An insolvency practitioner’s licence is not required if a person:
a) wishes to be appointed as a liquidator in a members’ voluntary winding up case, or a scheme manager in a scheme of arrangement case commenced under the IRDA; or
b) intends to only administer insolvency or debt restructuring cases which had commenced under the Bankruptcy Act (Cap. 20) and / or Companies Act (Cap. 50).
Transition to the IRDA
Section 527(1) of the IRDA provides a 6-month transitional period (effective from 30 July 2020 to 30 January 2021) that allows a person to undertake insolvency or debt restructuring work commenced under the Act without holding an insolvency practitioner’s licence, whilst his application for an insolvency practitioner’s licence is being considered by the Licensing Officer. This is provided that he possesses the necessary qualifications to do the same under the Companies Act (Cap. 50) and / or Bankruptcy Act (Cap. 20):
Scenario 1: If you are an approved liquidator registered with the Accounting and Corporate Regulatory Authority (“ACRA”) but not a public accountant, you will only be allowed to undertake appointments in winding up and receivership cases commenced under the IRDA.
Scenario 2: If you are a public accountant, you will only be allowed to undertake appointments in judicial management, bankruptcy and voluntary arrangement cases commenced under the IRDA.
Scenario 3: If you are a qualified solicitor, you will only be allowed to undertake appointments in bankruptcy or voluntary arrangement cases commenced under the IRDA.
A person who intends to undertake insolvency officeholder appointments under the IRDA should submit his licence application early and within the transitional period with the Licensing Officer to avoid acting without a valid insolvency practitioner’s licence.
At the end of the transitional period, a person who has undertaken such insolvency officeholder appointments in the transitional period must ensure that he holds a valid insolvency practitioner’s licence to undertake new and / or continue acting in existing insolvency or debt restructuring appointments commenced under the IRDA.