Not every financially distressed company needs a full-blown, expensive insolvency process. For years, the biggest problem for a struggling micro or small company in Singapore was that the standard tools – judicial management, schemes of arrangement, and court-supervised winding up – were simply too costly and too slow to be worth using. A company with modest debts could spend more on the process than the process could ever recover. The Simplified Insolvency Programme (SIP) was created to fix exactly that gap, and in 2026 it has been revamped and made a permanent part of Singapore law.
This guide explains the Simplified Insolvency Programme in Singapore as it stands in 2026 – what it is, the two tracks it offers, who now qualifies after the 2026 revamp, how it works, and how it compares with the heavier restructuring and liquidation options. It is written for directors and owners of smaller companies who are under financial pressure and want to understand their options before things reach crisis point.
What the Simplified Insolvency Programme is
The SIP is a streamlined, lower-cost insolvency framework administered by the Official Receiver at the Ministry of Law’s Insolvency Office. It was first introduced as a temporary measure during the pandemic to help smaller companies restructure debts or wind down cheaply. Following legislative amendments, it has been revamped as SIP 2.0 and permanently incorporated into the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), commencing on 29 January 2026.
The core idea is proportionality: cut down the formality, paperwork and cost so that the process fits the size of the company. Instead of full court supervision and the machinery that larger insolvencies require, the SIP relies more heavily on the Official Receiver and simplified procedures.
The two tracks: SDRP and SWUP
The SIP is not one process but two, and choosing between them is the first strategic decision.
Simplified Debt Restructuring Programme (SDRP)
The SDRP is for a company that is viable but over-indebted – the business can survive if its debt is restructured. It offers a faster, cheaper route to propose a restructuring plan to creditors and bind them to it, borrowing concepts from the scheme of arrangement but stripped down for smaller companies. If the plan is approved by the required majority of creditors and accepted by the court, the company continues to trade under the compromised terms. It is, in effect, a lightweight version of the pre-pack scheme of arrangement.
Simplified Winding Up Programme (SWUP)
The SWUP is for a company that is no longer viable and needs to be wound up. It provides a simplified, lower-cost liquidation, again driven by the Official Receiver rather than a full court-supervised process. The company’s assets are realised and distributed to creditors following the usual insolvency priorities – see our guide on the priority of payments in a Singapore liquidation – but the process is cut down to fit a small company. For how assets flow to creditors, see our explainer on the distribution of assets in a Singapore liquidation.
Who qualifies after the 2026 revamp
The eligibility rules are the headline change in SIP 2.0. Under the original programme, access was limited to micro and small companies (MSCs), broadly defined by annual sales turnover – micro companies with revenue below S$1 million and small companies with annual sales not exceeding S$10 million, subject to other criteria such as employee numbers and asset values.
SIP 2.0 shifts the key threshold to a company’s liabilities. Under the revamped programme, a central eligibility criterion is that the company’s liabilities do not exceed S$2 million. This deliberately widens the net so that the programme also benefits companies that are not, strictly, MSCs, while still keeping the SIP focused on genuinely small insolvencies. Additional conditions continue to apply – for example, around the company’s Singapore connection, the absence of ongoing insolvency proceedings, and the honesty of the company’s dealings – and the Official Receiver assesses each application against the current criteria.
Because the detailed conditions are set out in the IRDA and its subsidiary legislation and can be adjusted, directors should confirm the current thresholds against the Ministry of Law and the IRDA 2018 on Singapore Statutes Online before assuming they qualify.
How the process works in outline
1. Assess viability and choose the track
Directors, ideally with professional advice, decide honestly whether the company is viable (pointing towards the SDRP) or not (pointing towards the SWUP). Getting this wrong wastes time and money.
2. Apply to the Official Receiver
The company applies to accept it into the relevant programme, supported by the required declarations and financial information. The Official Receiver checks eligibility and either accepts or rejects the application.
3. Run the simplified procedure
For the SDRP, the company formulates a restructuring plan, creditors vote, and the plan – if approved – is put before the court for the necessary order. For the SWUP, the Official Receiver or an appointed party realises assets and distributes proceeds to creditors under a simplified process.
4. Conclude
Under the SDRP the company emerges bound by the restructuring terms; under the SWUP the company is wound up and ultimately dissolved. Throughout, directors remain subject to their duties and to the antecedent-transaction rules – so pre-insolvency conduct such as unfair preferences and other voidable transactions can still be unwound.
SIP vs judicial management and standard winding up
The SIP sits below the heavier corporate rescue and liquidation tools. Judicial management and full schemes of arrangement remain the right choice for larger or more complex companies – see our comparison of judicial management vs winding up in Singapore. The SIP’s advantage is cost and speed for small companies; its limitation is that it is deliberately confined to smaller, simpler cases. A company with substantial or contested liabilities, cross-border assets, or a complex creditor mix will usually fall outside the SIP and need the standard processes.
It is also worth distinguishing the SIP from simply striking off or voluntarily winding up a solvent company. Striking off suits a dormant or debt-free company; the SIP is designed for companies that are in financial difficulty and cannot pay their debts.
Why the SIP matters for small companies
Before the SIP, many small companies drifted – unable to afford a proper restructuring, unwilling to face an expensive winding up, and slowly accumulating debt while directors risked personal exposure for trading while insolvent. By making a proportionate process permanently available, SIP 2.0 gives directors of smaller companies a realistic, affordable way to either save a viable business or close an unviable one cleanly and lawfully. Acting early – while the company still has options – is almost always better than waiting for a creditor to force the issue.
Raffles Corporate Services helps directors of smaller companies understand their options under the Simplified Insolvency Programme, prepare the necessary financials and declarations, and coordinate with insolvency professionals and, where court steps are involved, experienced Singapore law firms. If your company is under financial strain, the earlier you take advice, the more options you keep.
— The Editorial Team, Raffles Corporate Services