Bankruptcy is not a familiar story you would like to hear. However, due to various reasons or due diligence tasks, we may need to do bankruptcy searches for individuals and corporations before making essential decisions later.
Bankruptcy involves current and future legal implications and impacts people, be it professional, personal, or financial matters. You may realize Singapore has a legal system called “common law,” one which is different from some of the region’s countries.
What Is a Bankruptcy and Insolvency Search?
You always face some legal terms in the process such as those mentioned above; what you see is:
A corporate insolvency search
Anyone can investigate a Singaporean company’s liquidation status. What you know through the search is whether the court has wound up the company. Insolvency referring to the obligations to repay creditors is most likely why the court winds up a company.
A bankruptcy search
If you need to ensure a person’s bankruptcy status in Singapore, you can see through the database whether a person has been declared bankrupt by the High Court. The term “bankrupt” refers to a person who cannot pay up the debt of more than $15,000 Singapore dollars.
Who Can Conduct a Bankruptcy or Corporate Insolvency Search?
As I mentioned earlier, anyone can search out of work or other reasons, whether an employee, an investor, an employer, a creditor, or a job applicant. He may search the Singaporean citizens’ and companies’ database by paying a visit to the Singaporean Ministry of Law’s insolvency office or through the official website: https://eservices.mlaw.gov.sg/io/.
Purposes for Conducting a Bankruptcy Research
People with the following positions likely conduct bankruptcy searches:
They are the definite business entity required to check debtors’ status before making any business deals. From the business point of view, a lender views a bankrupt person as more likely than not to default on his debt.
2. Employers and existing employees
An employer may need to do a bankruptcy search to determine whether a candidate is fit for a post by his/her financial status. Employers might need to confirm an employee’s financial fitness to assign important tasks to an employee. In management positions like a director post, high court permission is required for a bankrupt individual.
Similarly, people working for an employer may want to know if an employer can pay salaries on time. Furthermore, they may be worried about their work prospects if the company’s financial circumstances are in jeopardy.
3. Job applicants
A candidate may need to understand a company’s insolvency situation and may not be willing to work for a distressing company due to a lack of future career prospects and financial stability.
Conducting insolvency searches is a part of due diligence work. When an investor finds a to-be-invested corporation in a financially dire situation, he may change his mind to refrain from losses.
Moreover, journalists and scholars also conduct bankruptcy searches for work and studies concerned.
When Should Bankruptcy and Corporate Insolvency Searches Be Conducted?
For investors, creditors, employers, and job applicants, conducting bankruptcy searches is a one-time task before making any further and in-depth decision. You may waste time and other resources without doing the preliminary work and, in the end, pinpoint an “ideal” prospect with financial problems you could find out earlier.
Existing employees can detect financial hardship by regularly examining the company’s situation, including insolvency searches.
How to Conduct a Bankruptcy and Insolvency Search?
Most of the searches are performed online via the website of the Law Ministry’s insolvency office. If an organization has “partner access” right to the Ministry’s search facilities, you, belonging to the organization, can conduct a search via the Creditor’s Portal with SingPass.
You should get ready for the following information:
- For Corporate Insolvency searches: Company’s name, Winding-up Reference Number or Unique Entity Number(UEN).
- For Individual Bankruptcy searches: An individual Identification or Bankruptcy Number.
By providing the above information, you can access the information requested and pay for results for a review.
The cost is $6 per search result if you use an online search. The fee is the same for 1. whether it is an individual or corporate case; 2. no matter what the search status is.
You can pay by Visa, Master credit, or debit cards or by eNETS Direct Debit.
How Long Can You Keep a Bankruptcy Record?
- You can have your bankruptcy record deleted after five years of discharge of a bankruptcy order.
- However, the bankruptcy order may permanently stay on the record under the situations: 1. Being discharged from first-time bankruptcy, a person has not paid up to target contribution in full for seven years; 2. Being discharged from multi-bankruptcy, a person has not paid up to target contribution in full after nine years.
- Corporate insolvency records are not removable and remain in the database permanently.
What Happens After the Search?
You should consider the following steps after searching for a bankrupt status for an individual or a company’s winding-up order.
- If a creditor finds that a borrower is bankrupt, he may decline the loan request or review the terms and make them more stringent for the debtor to follow if he accepts the loan, like higher interest rates and strict payment schedules.
- If an existing employee declares bankrupt, the employer may review his job status and require the employee to get permission from the High Court to continue a management job or director position.
- An employer finds that an employee is bankrupt, he may reconsider a more suitable position for his situation.
- Suppose a job applicant finds that a company is in a winding-up status. In that case, he may retrieve the application for a job vacancy or decline the offer if the company accepts the candidate and offers the terms in return.
- An investor may decline to invest in a company under the court’s service of a winding-up order.
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