In forceAmended2020 Revised Edition

Contents

Companies Act 1967 · 2020 Revised Edition · Part 7 · Arrangements, Reconstructions and Amalgamations

210. Power to compromise with creditors, members and holders of units of shares

Amended

Last amended by an amending law of 2021. 4 amendments in all.

(1)

Where a compromise or an arrangement is proposed between —

(a)

a company and its creditors or any class of them;

(b)

a company and its members or any class of them; or

(c)

a company and holders of units of shares of the company or any class of them,the Court may, on the application in a summary way of any person referred to in subsection (2), order a meeting of the creditors, the members of the company, the holders of units of shares of the company, or a class of such persons, to be summoned in such manner as the Court directs.

(2)

The persons referred to in subsection (1) are —

(a)

in the case of a company being wound up — the liquidator; and

(b)

in any other case —

(i)

the company; or

(ii)

any creditor, member or holder of units of shares of the company.

(3)

A meeting held pursuant to an order made under subsection (1) may be adjourned from time to time if the resolution for the adjournment is approved by a majority in number representing three‑fourths in value of —

(a)

the creditors or class of creditors;

(b)

the members or class of members; or

(c)

the holders of units of shares or class of holders of units of shares,present and voting either in person or by proxy at the meeting.

If the conditions set out in subsection (3AB) are satisfied, a compromise or an arrangement is binding —

(a)

in the case of a company in the course of being wound up, on the liquidator and contributories of the company, and on all —

(i)

the creditors or class of creditors;

(ii)

the members or class of members; or

(iii)

the holders of units of shares or class of holders of units of shares,as the case may be; or

(b)

in the case of any other company, on the company and on all —

(i)

the creditors or class of creditors;

(ii)

the members or class of members; or

(iii)

the holders of units of shares or class of holders of units of shares,as the case may be.

The conditions referred to in subsection (3AA) are as follows:

(a)

unless the Court orders otherwise, a majority in number of —

(i)

the creditors or class of creditors;

(ii)

the members or class of members; or

(iii)

the holders of units of shares or class of holders of units of shares,present and voting either in person or by proxy at the meeting or the adjourned meeting agrees to the compromise or arrangement;

(b)

the majority in number referred to, or such number as the Court may order, under paragraph (a) represents three‑fourths in value of —

(i)

the creditors or class of creditors;

(ii)

the members or class of members; or

(iii)

the holders of units of shares or class of holders of units of shares,present and voting either in person or by proxy at the meeting or the adjourned meeting, as the case may be;

(c)

the compromise or arrangement is approved by order of the Court.

(3A)

[Deleted by Act 40 of 2018]

(4)

The Court may grant its approval to a compromise or arrangement subject to such alterations or conditions as it thinks just.

(4A)

[Deleted by Act 40 of 2018]

(5)

An order under subsection (3AB)(c) has no effect until a copy of the order is lodged with the Registrar, and upon being so lodged, the order takes effect on and from the date of lodgment or such earlier date as the Court may determine and as may be specified in the order.

(6)

Subject to subsection (7), a copy of every order made under subsection (3AB)(c) must be annexed to every copy of the constitution of the company issued after the order has been made.

(7)

The Court may, by order, exempt a company from compliance with the requirements of subsection (6) or determine the period during which the company must so comply.

(8)

Where any such compromise or arrangement (whether or not for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any 2 or more companies) has been proposed, the directors of the company must —

(a)

if a meeting of the members of the company by resolution so directs, instruct such accountants or solicitors or both as are named in the resolution to report on the proposals and forward their report or reports to the directors as soon as possible; and

(b)

make such report or reports available at the registered office of the company for inspection by the shareholders, creditors and holders of units of shares of the company at least 7 days before the date of any meeting ordered by the Court to be summoned as provided in subsection (1).

(9)

Every company which makes default in complying with subsection (6) or (8) and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000.

(10)

Where no order has been made or resolution passed for the winding up of a company and any such compromise or arrangement has been proposed between the company and its creditors or any class of such creditors, the Court may, in addition to any of its powers, on the application in a summary way of the company or of any member, creditor or holder of units of shares of the company restrain further proceedings in any action or proceeding against the company except by permission of the Court and subject to such terms as the Court imposes.

(10A)

Where the terms of any compromise or arrangement approved under this section provides for any money or other consideration to be held by or on behalf of any party to the compromise or arrangement in trust for any person, the person holding the money or other consideration may, after the expiration of 2 years and must before the expiration of 10 years from the date on which the money or other consideration was received by the person, transfer the money or other consideration to the Official Receiver.

(10B)

The Official Receiver must —

(a)

deal with any moneys received under subsection (10A) as if the moneys were paid to the Official Receiver under section 197 of the Insolvency, Restructuring and Dissolution Act 2018; and

(b)

sell or dispose of any other consideration received under subsection (10A) in such manner as the Official Receiver thinks fit and must deal with the proceeds of such sale or disposal as if it were moneys paid to the Official Receiver under section 197 of the Insolvency, Restructuring and Dissolution Act 2018.

(11)

In this section —

“arrangement” includes a reorganisation of the share capital of a company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both these methods;

“company” means any corporation liable to be wound up under the Insolvency, Restructuring and Dissolution Act 2018;

“holder of units of shares” does not include a person who holds units of shares only beneficially.

Terms defined in s 4

Act
Defined · s 4
“Act” includes any regulations;
Open s 4
company
Defined · s 4
“company” means a company incorporated under this Act or under any corresponding previous written law;
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constitution
Defined · s 4
“constitution”, in relation to a company, means —(a)the constitution of the company which is registered with the Registrar under section 19, as may be amended from time to time; and(b)in the case of a company incorporated before 3 January 2016, the memorandum of association of the company, the articles of association of the company, or both, in force immediately before that date;
Open s 4
corporation
Defined · s 4
“corporation” means any body corporate formed or incorporated or existing in Singapore or outside Singapore and includes any foreign company but does not include —(a)any body corporate that is incorporated in Singapore and is by notification of the Minister in the Gazette declared to be a public authority or an instrumentality or agency of the Government or to be a body corporate which is not incorporated for commercial purposes;(b)any corporation sole;(c)any cooperative society;(d)any registered trade union; (da)any platform work association registered under the Platform Workers Act 2024; or(e)any limited liability partnership;
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Court
Defined · s 4
“Court” means the General Division of the High Court;
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liquidator
Defined · s 4
“liquidator” includes the Official Receiver when acting as the liquidator of a corporation;
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lodged
Defined · s 4
“lodged” means lodged under this Act or any corresponding previous written law;
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officer
Defined · s 4
“officer”, in relation to a corporation, includes —(a)any director or secretary of the corporation or a person employed in an executive capacity by the corporation;(b)a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and(c)any liquidator of a company appointed in a voluntary winding up,but does not include —(d)any receiver who is not also a manager;(e)any receiver and manager appointed by the Court;(f)any liquidator appointed by the Court or by the creditors; or(g)a judicial manager appointed under Part 7 of the Insolvency, Restructuring and Dissolution Act 2018;
Open s 4
Official Receiver
Defined · s 4
“Official Receiver” means the Official Receiver appointed under section 17(1) of the Insolvency, Restructuring and Dissolution Act 2018 and includes a Deputy Official Receiver, a Senior Assistant Official Receiver and an Assistant Official Receiver;
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registered
Defined · s 4
“registered” means registered under this Act or any corresponding previous enactment;
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Registrar
Defined · s 4
“Registrar” means the Registrar of Companies appointed under this Act and includes any Deputy or Assistant Registrar of Companies;
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share
Defined · s 4
“share” means share in the share capital of a corporation and includes stock except where a distinction between stocks and shares is expressed or implied;
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