Search for answers on the most commonly fielded questions regarding business in Singapore, such as incorporation, annual compliance, visa requirements and more.

Singapore Company Setup questions and answer

Singapore Company Setup questions and answer

Does Singapore company need to notify the increase in the authorized capital?

Answer:

There is no longer the concept of authorized capital. A Singapore company can issue more shares if the required approval or authourization under the Act has been obtained. No, there is no need for the Singapore company to report the increase in authorized capital.

How do we apply for an amalgamation?

Answer: With the new Singapore Amendment Act coming into force on 30th Jan 06, the Singapore company may file an application with the Singapore company Registrar not more than 2 months before the intended amalgamation date if one is specified in the amalgamation proposal. The form Registration of Amalgamation needs to be lodged with:

  • an amalgamation proposal
  • declarations required under section 215C or 215D, a declaration by the directors with the memorandum of the amalgamating Singapore companies
  • solvency statements
  • other relevant documents

Singapore Company’s requirements for reducing Singapore Company’s share capital?

Answer:

Companies may refer the Singapore Companies (Amendment) Regulations 2006 which will be issued after 30th Jan 06. They may also refer to Practice Direction No 2 of 2006 which is available on ACRAs website .

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How does Singapore company apply for a reduction of its share capital after 30th Jan 06?

Answer:

Companies will not be required to notify ACRA of the particulars of the authorised capital and the par value of the share. The share capital of the company will be referred to as the Issued Capital in BizFile records and reports. The term Paid-up Capital will be still be used to denote the amount paid on issued shares.

How will the information on these Singapore amalgamated companies be reflected?

Answer:

Example: Company A + Company B amalgamate to form a new company known as Company C. The business profiles of the 3 companies will reflect the following information: Profile of Company A Status will be shown as “Amalgamated” with Company B (Registration No) to form Company C (Registration No) Profile of Company B Status will be shown as “Amalgamated” with Company A (Registration No) to form Company C (Registration No) Profile of Company C Status will be shown “Live” and another statement will be displayed to the effect that the company was amalgamated from Company A (Registration No) and Company B (Registration No)

How do I get the Singapore Company’s capital reduced without going to Court?

Answer: 

There are several procedural steps to be taken and it is advisable that companies obtain professional advice. Directors have to provide the solvency statements (if the nature of reduction requires one) and inform the Comptroller of Income Tax and comply with the publicity requirements. Creditors may apply to court to cancel the resolution. If there is no such objection after 6 weeks but no later than 8 weeks after the resolution date, the company can lodge the relevant form with ACRA for the reduction to take effect. Companies are advised to lodge the relevant form and documents within the time stipulated in the Act ; if not, Bizfile will reject their filing for non-compliance with the Act.Companies may note that an Order of Court is no longer required with effect from 30th Jan 06. The company will need: -to pass a special resolution for capital resolution, -notify the Comptroller of Income Tax -to meet solvency requirements -to meet publicity requirements

Must Singapore company be solvent before commencing a share buy back?

Answer: 

Yes, the Singapore company must be solvent, which means the company must be able to pay its debts in full at the time of payment and as they fall due in the normal course of business during the period of 12 months immediately after. In addition, the value of the Singapore company’s assets must not be less than that of its liabilities (including contingent liabilities) before and after the buy-back (please see Section 76F(4) of the Companies Act.). Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 What are the ACRA Singapore Companies e-forms which are available?

Answer: 

Amendments will be made to the following e-forms on 30 Jan 2006 to remove references to the authorised capital, share premium and nominal value, if any of these terms appear therein:

  • Apply for new company name;
  • Incorporate a Private Company;
  • Incorporate a Public Company- Limited by Shares;
  • Summary of Returns of Local Company Having A Share Capital;
  • Notice by Local Company of Alteration in Share Capital Other Other Than Increase in Capital (to be renamed as Notice of Local Company Of Alteration in Share Capital)
  • Return of Allotment of Shares;
  • Notice of Redemption of Redeemable Preference Shares;
  • Notice By Local Company Of Transfer of Shares / List of Shareholders;
  • Notice of Purchase Or Acquisition Of Ordinary Shares / Stocks;
  • Notice of Purchase Or Acquisition Of Non-Redeemable Preference Shares ( to be renamed as Notice of Purchase Or Acquisition of Preference Shares);
  • Conversion of Company:
  • From an unlimited company to a company limited by shares;
  • From a public company limited by shares to a private company limited by shares

Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

What are the amendments to the Singapore foreign subsidiary incorporation?

Answer:
  1. Introduction of new fees payable to the Registrar of Companies under the Second Schedule of the Companies Act by the Companies (Amendment of Second Schedule) Notification 2006;
  2. Introduction of new regulations in the Companies (Filing of Documents)
  3. Regulations and an amendment to clarify when a company is an exempt private company by the Companies (Filing of Documents) (Amendment) Regulations 2006;
  4. Introduction of the publicity requirements for proposed reduction of share capital by the Companies (Amendment) Regulations 2006;
  5. Amendments of the Eighth Schedule of the Companies Act by the Companies Act (Amendment of Eighth Schedule) Notification 2006.

Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

ACRA Treatment of Singapore Company share capital on authorized capital and par value ?

Answer: 

Companies will not be required to notify ACRA of the particulars of the authorized capital and the par value of the share. The share capital of the company will be referred to as the Issued Capital in BizFile records and reports. The term Paid-up Capital will be still be used to denote the amount paid on issued shares.

What are the fees payable for amalgamation application?

Answer: 

The filing fee for registration of an amalgamation is $400 and another $300 is needed to be added if a new company is formed after the amalgamation.

What are the major amendments to the Singapore Companies Act?

Answer: 

The major amendments include : the removal of the concept of par value and authorised capital; reforms in the capital maintenance regime by introducing introduction of capital reduction procedures without the need to go to court for approval ; introduction of treasury shares which allows companies to hold the ordinary shares bought back as treasury shares and disposed off or cancel them at a later date orto transfer them to appropriate persons ; amalgamation which allows two or more companies to merge into one of the companies or form a new company.

What are the new changes to the share buy back regime?

Answer:

Currently, companies can only buy back shares out of their distributable profits. With effect from 30th Jan 06, they can buy back shares out of capital as well as or distributable profits.

What are the types of amalgamation?

Answer:

The main types of amalgamation are: Long form amalgamation – 2 or more companies amalgamate and continue as one of the existing companies or 2 or more companies amalgamate to form a new company. The amalgamated company can either have a new name, can retain the same name or adopt the name of one of the amalgamating companies. There will be five options to choose from in Bizfile. Short form amalgamation – amalgamation of holding company and subsidiaries or amalgamation of wholly owned.

What are treasury shares?

Answer: 

Treasury shares are ordinary shares or stocks purchased or otherwise acquired by a company in accordance with sections 76B to 76G of the Companies Act. These shares can be held by the company or may be sold, transferred or cancelled in accordance with section S76K.

What is meant by an amalgamation of Singapore companies?

Answer: 

An amalgamation is referring to the merger of 2 or more existing companies to form a new company or to continue as one of the existing companies.

What is the e-form required to be lodged with ACRA when the shares are cancelled or disposed of?

Answer: 

The e-new form to be filed online is known as Notice of cancellation or disposal which can be located under Local Company Transactions – Changes to Local Company. in BizFile.

What is the maximum amount Singapore company may hold after shares buy back?

Answer:  The maximum limit is 10% of total number of shares or 10% of total number of shares of each class.

What is the significant amendment to Singapore Companies Act with regard to amalgamation?

Answer: 

Currently, any amalgamation has to be approved by the Court under S212 of the Companies Act. The amendments to the Companies Act allow voluntary amalgamation without the need for a Court Order.

When do the amendments to the subsidiary legislation take place?

Answer:

The effective date, for the amendments to the subsidiary legislation, is 30th January 2006.

When must we notify the Comptroller of Income Tax on the intention to reduce share capital?

Answer: 

For both private and public companies, the notification must be sent within 8 days beginning with the resolution date.

When will the commencement date of Singapore Companies (Amendment) Act 2005 come into force?

Answer: 

The commencement date of the Amendment Act will come into force on 30th Jan 2006.

When will these amended and new forms be released?

Answer:

The new and amended forms will be uploaded into BizFile menu for use by 30th Jan 2006 at 0001hrs.

Must a Singapore company appoint a company auditor?

Answer: 

Yes. However, a company which is exempted from audit requirements under the Companies Act is exempted from the requirement to appoint an auditor of the company.

Employment Pass Renewal?

Answer:

Ministry of Manpower will mail an Employment Pass Renewal Form to your employer’s address two months before your EP expired. You should submit the renewal application four weeks prior to the expiration of your EP. Once approved, the new pass is ready to be picked up at the Ministry of Manpower and your employer will receive a letter of notification.

When Singapore company must hold its Annual General Meeting or AGM?

Answer:

Singapore company is required to hold its first AGM within 18 months from the date of incorporation. Subsequent Singapore Company’s Annual General meeting or AGM must be held every calendar year. However the interval between such AGMs must NOT be more than 15 months. Please seek professional advice from your Paul Hype Page & Co, ACRA  Certified Public Accounting Firm.

Is company secretary a necessary requirement for both public and private companies? What should be his/her required professional qualification?

Answer:

Section 171 of the Companies Act requires a company to appoint a company secretary. The office of secretary shall not be left vacant for more than 6 months at any one time. Private limited companies need not appoint a professionally qualified secretary. However a secretary must still be appointed. Only public companies must appoint a professionally qualified secretary. Examples of professionally qualified secretaries are lawyers, accountants and chartered secretaries.

If my company has one director and one shareholder left, is it compulsory to amend my M&AA?

Answer:

While the law does not mandate a company to amend its M&AA to cater to one director company, you may wi