(i) Individuals who wish to act as Approved Liquidators or Judicial Managers upon commencement of IRDA
Under the IRDA that takes effect on 30 Jul 2020, individuals who wish to act as a liquidator, Judicial Manager (JM) or Trustee in Bankruptcy (TIB) are required to be registered as Insolvency Practitioners (IP) with the Ministry of Law for the purpose of undertaking new winding up, JM or TIB cases that are commenced on or after the IRDA comes into effect. Accordingly, ACRA will not be accepting new applications to be Approved Liquidators (ALs) or public accountants for the purpose of becoming Judicial Managers (JM-PAs). More information on the new regime for insolvency practitioners can be found at https://lripd.mlaw.gov.sg(ii) Approved Liquidators (ALs)
With effect from 30 Jul 2020, all ALs will be declared by the Minister by way of order under section 9(1) of the Companies Act (1) to be a specified class of persons. Persons in this class of ALs can be appointed as (a) liquidators of any winding up cases commenced under the Companies Act or LLP Act and outstanding at the time the IRDA comes into effect (pre-IRDA cases), including as replacement liquidators of such cases when the appointed liquidators resign or cease to be approved liquidators; and (b) liquidators of winding up cases in relation to Variable Capital Companies and its sub funds (VCC) during the interim period until the VCC Act has been updated to allow IPs to undertake such work.(iii) JM-PAs who are currently appointed as Judicial Managers
JM-PAs who are appointed as JMs or TIBs of companies placed under judicial management or a bankruptcy order before the commencement of the IRDA, for which the JM or TIB work is ongoing, will be allowed, upon application for renewal and subject to meeting renewal requirements, to renew their PA registration until the completion of these cases. This is to avoid any disruption to these cases.JM-PAs who are not appointed as JMs or TIBs of companies placed under judicial management or a bankruptcy order before the commencement of the IRDA will not be allowed to renew their registration as public accountants when their current certificate of registration expires. They are required to be registered as IPs with MinLaw to undertake JM or TIB work that commenced under the IRDA.
Transition Period
The IRDA provides for a transitional period of 6 months from 30 Jul 2020 to 29 Jan 2021 (both dates inclusive), during which ALs and JM-PAs may act as liquidator or JM or TIB for cases commenced under the IRDA while they apply to MinLaw to be registered as IPs. However, should their IP application be rejected, they will have to cease their appointment for these cases commenced under the IRDA. ALs and JM-PAs who have undertaken insolvency or JM or TIB appointments in cases commenced under the IRDA during the 6-month transitional period will be required to hold a valid IP licence in order to continue administering these cases after the transitional period.
Please refer to Table 1 and 2 below for a summary of the impact of IRDA on ALs and JM-PAs respectively.
JM-PAs who are appointed as JM or TIB and for which the JM or TIB work is not completed before 30 July 2020 are known as JM-PAs with pre-IRDA cases.
Table 1: Impact of IRDA on ALs
| All ALs | |
|---|---|
| Status of AL Licence | Continue to be ALs until the AL Licence is cancelled voluntarily or revoked by by ACRA on grounds such as bankruptcy etc. |
| AL Licence to be revoked? | No - the AL licence can be retained for ALs to act as (a) replacement liquidators in pre-IRDA cases and (b) liquidators of winding up cases in relation to Variable Capital Companies and its sub funds during the interim period until the VCC Act has been updated to allow IPs to undertake such work. |
| Renewal of AL Licence? | Not required |
Table 2: Impact of IRDA on JM-PAs
| JM-PA with Pre-IRDA cases | JM-PA without Pre-IRDA case | |
|---|---|---|
| Status of PA registration |
Subject to application for renewal, will continue to be registered as JM-PAs until the completion of the last pre-IRDA case. |
Continue to be registered as JM-PAs until the expiry of the current certificate of registration as a PA. |
|
PA Registration to be revoked? |
No | No |
| Renewal of PA Registration? |
Yes – on a yearly basis in December. |
Not allowed to renew. |
Timeline
The timeline for the implementation is as follows:| Date | ALs | JM-PAs |
|---|---|---|
| 30 July 2020 | IRDA comes into effect | |
| On/After 30 July 2020 |
|
|
| From 31 July 2020 to 30 January 2021 |
Transitional Period ALs/JM-PAs can take up post-IRDA cases during this period without holding an IP licence, while they apply to MinLaw to be IPs.
Should the application be rejected, ALs/JM-PAs will have to cease their appointment on post-IRDA cases. |
|
| From 31 January 2021 |
Only individuals who are registered as IPs can act as liquidators for post-IRDA cases. |
Only individuals who are registered as IPs can act as JMs or TIBs for post-IRDA cases. |
| 1 – 31 March 2021 | No renewal of AL licence is required. | N/A |
| 1 - 31 December 2021 | N/A |
JM-PAs with cases commenced before 30 July 2020 (i.e. pre-IRDA cases) that are yet to be completed may apply to renew their registration as a PA. |
Resources
- More information on the new regime for insolvency practitioners can be found at https://lripd.mlaw.gov.sg
- FAQs on Impact of IRDA on ALs and JM-PAs
