COVID-19 FAQ

QUESTIONS & ANSWERS RELATING TO THE COVID-19 (TEMPORARY MEASURES) ACT 2020 (No. 14 of 2020)

1. A creditor has commenced winding up proceedings against my company before the commencement of the prescribed period. Will the revised threshold amount of $100,000 for winding up cases apply?

No. As the winding up application was brought before the commencement of the prescribed period, the threshold amount of $100,000 will not apply.
[Applies to companies, LLPs and VCCs]

2. A creditor has issued a statutory demand to my company before the commencement of the prescribed period, giving 3 weeks’ notice for repayment. Now that my company cannot pay, will the revised 6 months’ threshold be applicable?

No. As the statutory demand was issued before the commencement of the prescribed period, the 6 months’ threshold will not apply.
[Applies to companies, LLPs and VCCs]

3. My company has been borrowing heavily to keep our operations afloat and I am uncertain if the company will survive this crisis. As the company director, will I be at risk of committing an offence if I continue trading during this period?

A company is not treated as incurring debts or other liabilities without reasonable prospect of meeting them in full if the debt or other liability is incurred:
a) in the ordinary course of business;
b) during the prescribed period; and
c) before the appointment of a judicial manager or a liquidator of the company.
[Applies to companies, LLPs and VCCs]

4. My company has been borrowing heavily to keep our operations afloat during the prescribed period. As the company director, will I be at risk of committing an offence for wrongful trading once the prescribed period expires?

Despite the expiry of the prescribed period, a company will not to be treated as incurring debts or other liabilities without reasonable prospect of meeting them in full if the debt or other liability is incurred by the company during the prescribed period.
[Applies to companies, LLPs and VCCs]

5. When is the prescribed period?

Pursuant to COVID-19 (Temporary Measures) (Prescribed Period) Order 2020, the prescribed period is 6 months commencing on 20 April 2020.

THE COVID-19 (TEMPORARY MEASURES) (ALTERNATIVE ARRANGEMENTS FOR MEETINGS) (CORPORATE INSOLVENCY) ORDER 2020 (the “Order”)

1. I am an insolvency practitioner and I am required to hold meetings within the circuit breaker period. Can I defer the meeting? If not, how can I proceed to hold the meeting?

You are allowed to defer these meetings up to a date no later than 30 September 2020. Please refer to schedule of the Order on how the meeting can be held via electronic means.

2. I am an insolvency practitioner and I am required to hold a Court-ordered or Court-directed meeting within the circuit breaker period. How should I hold the meeting?

This Order does not apply to meetings ordered or directed by the Court. For these meetings, you may wish to apply to seek directions from the Court or variation of orders if you so require, as to the safe distancing measures that you propose to implement at such meetings.

3. How long will the alternative arrangements apply?

The alternative arrangements apply for the period starting on 27 March 2020 and ending on 30 September 2020.

The amendments to the Order, which come into force on 29 September 2020, has extended the application of alternative arrangements to 30 June 2021.

4. How can I give notice of the meeting to be held by electronic means?

The notice of the meeting is to be given as follows:
(a) must be sent via email to each creditor, contributory, member of partner (as the case may be) who has notified the convenor or the company, limited liability partnership or VCC (as the case may be) of his or her electronic mail address;
(b) must be published on the website of the company, limited liability partnership or VCC (as the case may be) or the website of the convener;
(c) must describe the means which meeting can be electronically accessed (e.g. online location);
(d) must set out how a creditor, contributory, member or partner (as the case may be) may vote at the meeting; and
(e) may be accompanied by any other documents relevant to the meeting.

5. How can the quorum for the alternative meeting be met?

The quorum may be met by creditors, contributories, members or partners (as the case may be) being personally or electronically present at the meeting. The requirements for verifying electronic presence are set out in the Schedule to the Order.

6. What are the other refinements in the amendments to the Order that are applicable to insolvency-related meetings?

The following refinements were made in the amendments to the Order, which come into force on 29 September 2020:
(a) Real-time electronic voting: as long as certain prescribed safeguards are adopted, and the entity still allows attendees to vote by appointing the Chairman or convenor as the case may be) as their proxy to vote. This option applies to meetings held or conducted on or after 1 October 2020 up to the expiry of the Order;
(b) Real-time Q&A: as long as the entity also allows attendees to submit matters which they wish to raise at the meeting prior to the meeting by post or electronic mail;
(c) Use of virtual AGM platforms and other electronic means to accept submissions: as long as the entity also allows such submissions by post or electronic mail.

More information on the amendments to the Order can be found in https://www.mlaw.gov.sg/news/press-releases/refinements-to-alternative-arrangements-for-meetings.