A company may have enough cash for this week while facing a serious inability to meet upcoming obligations. Directors should obtain prompt professional advice and a reliable financial picture rather than relying on the current bank balance alone.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
This is a decision-preparation exercise, not a substitute for an insolvency assessment on the actual facts.
Collect the immediate warning signs
Identify overdue debts, demands, enforcement correspondence, rejected payments and funding that has not materialised. Preserve service dates and deadlines on legal documents.
Do not treat a disputed invoice, statutory demand and court document as interchangeable. Have legal advisers assess each promptly.
Example: one large debt falls due next month
Payroll can be met now, but the forecast depends on uncommitted investor money to repay a major creditor later. Present the uncertainty clearly. An expression of investment interest is not a completed funding source.
Prepare the board’s factual pack
- Available cash and restrictions on its use.
- Liabilities by creditor, due date and dispute status.
- Assets and realistic recovery assumptions.
- Guarantees, security and related-party balances.
- Cash forecasts with downside scenarios.
- Demands, proceedings and urgent response dates.
Keep supporting records accessible to the accountant and legal advisers. Explain missing information rather than filling gaps with unsupported figures.
Review transactions before acting
Seek advice before unusual asset transfers, selective payments, new guarantees or taking further customer money where performance is uncertain. The legal assessment depends on the facts and applicable insolvency rules.
Do not move assets to another company merely to place them beyond creditors, or destroy records to simplify the file.
Assess the appropriate route
ACRA’s closure guidance distinguishes strike-off for an inactive debt-free company from winding-up routes where debts need to be dealt with. Specialist advisers should assess rescue, negotiation or formal processes as appropriate.
Record decisions, advice, assumptions and follow-up dates accurately. Reassess when material facts change rather than treating one forecast as permanent reassurance.
Does paying this week’s bills prove the company is financially safe?
No. Review the full obligations and reliable forecasts.
Can the company ignore a legal deadline while preparing accounts?
No. Obtain prompt advice on the specific document and response required.
Related practical business guides
Read our company deadline planning guide, accurate decision records checklist and funding delay guide.
Get help with the next step
Email [email protected] or WhatsApp +65 8501 7133. Our accounting team and tax advisers can assist with financial and tax questions. Legal advisers from our associated law firms can assist with contracts, employment matters, business disputes and financial-distress questions.