Singapore Passes the Covid-19 (Temporary Measures) Act 2020 to Support Businesses and Enterprises
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As with many other jurisdictions around the world affected by the Covid-19 coronavirus epidemic, the Singapore government has put in place a variety of measures intended to allow businesses to keep going in these times of unprecedented disruption.
One of the key issues faced by businesses is the disruption to their cash flow resulting from the government lockdowns. Businesses forced to close their doors in the face of ongoing payment obligations face the risk of insolvency. Corporates prohibited from calling meetings due to social distancing measures must grapple with how to raise funds if shareholder meetings cannot be called.
In response to these and other concerns, the Singapore Parliament passed the Covid-19 (Temporary Measures) Act 2020 (C-19 TM Act). The C-19 TM Act was passed within a day. Among other things, it puts in place moratoria provisions prohibiting the taking of court and insolvency proceedings against those businesses most vulnerable during this period of shutdown. It goes so far as to make the taking of actions in breach of the moratoria provisions a criminal offence. At the same time, the relief was carefully scoped to minimise the risk of abuse. This update looks at the moratoria provisions as they apply to loan facilities, leases and construction and supply contracts. It also considers the relief provided to directors and officers of corporate entities, as well as the provisions on virtual meetings.
