Ownership transfers of businesses based in Singapore differ based on the business entity which is to have its ownership transferred. Owners of sole proprietorships, partnerships, and private limited companies transfer their ownership of such entities in different ways.
It is important for business owners all over the world to know just when it is in their own, as well as their business’s, best interests to no longer be the owner of their company. Some business owners who find themselves in such a predicament might choose to dissolve the company, thus ending the company’s existence forever. However, others who would prefer that the company remains active even after they relinquish control over it might transfer the ownership of the company to another person or legal entity. Such procedures are relatively common in Singapore: many owners of Singapore companies have transferred their ownership of such companies to other people or legal entities for any of various reasons.
Transferring Ownership of a Sole Proprietorship or Partnership
Any confirmation of a transfer of ownership of a sole proprietorship or partnership in Singapore is to be done online via BizFile+. Such transfers are to be conducted through the use of a SingPass or CorpPass. Before the actual transfer of ownership may take place, the sole proprietor, one or more of the partners, or an authorized representative is to lodge any changes to the business ownership online; this is also done via BizFile+. Such transfers are to be completed within 14 days of the date on which the change took place. If this is done after more than 14 days elapses, a fine will be imposed on the person who initiated the transfer.
It should also be noted that certain changes do not require any approval or endorsement from any authorities. Such changes which may proceed unapproved include changes of business name, changes to the details of the company’s business activities, and changes of business address. For this reason, any Singapore business owner who plans to transfer ownership of the business has to be aware of which changes require the authorities’ approval and which do not.
Transferring Ownership of a Private Limited Company
Ownership transfers of private limited companies in Singapore take place in the form of share transfers. This is because the shareholders own a private limited company through the ownership of its shares. Before the ownership of a private limited company in Singapore may be transferred, a document must be signed for the purposes of acquisition. Stamp duty will be imposed on the document to be signed; this stamp duty is to be paid to the Inland Revenue Authority of Singapore (IRAS) when the company’s shareholders transfer their shares. This stamp duty is either charged against the actual price of the shares or the shares’ value, whichever happens to be higher.
Every transfer of share ownership in Singapore will involve the input of both a transferor and a transferee. The transferor is the existing shareholder who is relinquishing shares. The transferee is the person or entity to be the intended recipient of the shares which the transferor is transferring.
The net asset value or the allotment price of the shares which are transferred will be taken as the value of all shares which are to be transferred. In some private limited companies, different classes of shares exist. When such is the case, the exact net asset value is dependent on the rights related to each respective class of share.
Of course, before you can transfer the shares of any company in Singapore, you will first have to own a Singapore-based company. In this matter, we at Paul Hype Page & Co will be able to assist you. Our incorporation team will see to it that every matter related to your new company’s incorporation in Singapore is properly addressed. We will also ensure that your company complies with every business law which exists in Singapore today.