In Singapore, liquidation is a common process that enables companies to address excessive debts. The process is similar to the process used in the U.S. through Chapter 11 bankruptcy. The business can walk away without owing anything to creditors and acquire some funds after the process is completed. The following is a review of the liquidation process for companies and businesses.
Starting the Process
The business provides the ministry of law with all deeds and titles for all assets and properties connected to the business itself. These assets are not connected to the business owner’s personal properties or assets. They are separate from the company, and creditors are not allowed to seize personal assets through the liquidation process. However, it does include assets such as any existing inventory, machinery, and automobiles used by the company.
How are These Items Sold
In most cases, the court assigns an assessor to the case to manage the sale of the assets. They can sell these items through private sales, auctions, or by introducing them to hopeful investors. The purpose is to try to achieve the highest price possible for these assets to settle debts. Once proceeds are collected, the assessor distributes the proceeds to the creditors to pay off the debts.
What Portion of the Proceeds Belongs to the Owner?
Instead of using exempted values such as those available in the U.S., Singapore can only provide proceeds to the owner if there are any leftover after the debts are settled. The owner identified in the court documents will receive these proceeds. However, if the company was a corporation and had shareholders, these shareholders are entitled to a divided value of the proceeds.
What Happens to the Company?
At the end of liquidation, the company no longer exists. All properties are seized through liquidation. The owner can no longer take any action through the company, and they cannot restart this business.
In Singapore, liquidation provides the company with a clear solution for excessive debts. The process allows businesses to shut down and sell off all assets to pay off these debts. Businesses that need further answers about liquidation can visit irblaw.com.sg today.