Accounting and Corporate Regulatory Authority (ACRA) is the registrar of companies in Singapore. They primarily review the types of shares in a company, the distribution of shares among shareholders, share capital, and the responsibilities of shareholders. This guide serves as a concise breakdown of the regulations concerning company shares and company shareholders in Singapore.
Share Capital Requirements in Singapore
In Singapore, share capital refers to the money invested into the company by shareholders, in exchange for company shares. A company’s total share capital can be split into two separate categories known as paid-up capital and unpaid capital. This is because ARCA allows companies to legally issue shares without receiving full payment of the share capital.
Paid-up capital: Money that shareholders have fully paid for a company’s shares.
Unpaid share capital: None of the money due for issued shares have been paid.
These shareholders are offered dividend rights, voting rights at general meetings, and the license to acquire a fair share of the company’s assets upon dissolution.
These shareholders do not have the right to vote at general meetings. Non-voting shares are usually issued to company employees.
These shareholders receive special rights over ordinary shareholders regarding dividend payments. These shareholders can receive their dividend checks before regular shareholders.
This refers to custom-defined categories of shares, determined by the company’s structure. The creation of these share classes (Class A, Class B, Class C) gives different privileges to these shareholders.
These shares are issued to the business owners or business founders. It often comes with extra voting rights.
These shares a usually issued with a condition that the company will reclaim and buy back these shares in the future.
Companies will hold off dividend payouts to these shares until the rest of the shares have received its rightful minimum allocation.
Singapore Company Shareholder Requirements
In Singapore, a private limited company must have a minimum of 1 and a maximum of 50 shareholders. Individuals and corporations can register as a shareholder, and 100% company ownership by foreign shareholders is allowed in Singapore. The shares allocated come with rights and privileges, which determine the roles and responsibilities of the company’s shareholders.
NOTE: Company shareholders in Singapore does not hold any company assets and is not liable for any company debt. This is because a shareholder is considered a company owner and the company is considered a separate legal entity.
A company can issue new shares by simply passing an ordinary resolution along with other shareholders and filing for a return of allotment. This is done through ACRA and BizFile, all within 14 days of issuing the shares. The following list consist of the details required:
The number of shares in the allotment
The amount paid or deemed to be paid on the allotment of each share (if applicable)
The amount unpaid on each share (if applicable)
The classes of shares you are issuing (if applicable)
The full name, identification, nationality, and address (for shareholders who are individuals)
The corporation’s name or UEN and physical address (for shareholders that are corporations)
The number of shares owned by each shareholder and the corresponding share classes
Share Transfer in Singapore
Shares can be bought and sold between shareholders; however, this process is governed by the company constitution. After a transfer of shares has taken place, the company must report it by filing a notice of transfer of shares with ACRA using Biz File or report the transfer in the annual returns.