For any of various reasons, a person who owns a private limited company based in Singapore might plan to transfer the ownership of the company. A transfer of ownership of a private limited company is made through a transfer of shares because the ownership of such a company is in the form of shares. Such a transfer may be made to another person, a group of people, or even a corporate entity. However, before the ownership transfer can be made, the reason for the transfer must usually be made evident. This step might not always be necessary in certain instances. There are also several other matters which must be properly managed before the shares and thus ownership of a Singapore private limited company may be completely transferred.
Legal Matters Related to Ownership Transfers
There are also specific instances in which the person who is to transfer the shares of a Singapore private limited company may require appropriate legal assistance before doing so in order to ensure that the entire process is conducted in the appropriate manner. There may need to be a contract prepared in order for the transfer of the shares to be made official. Such a contract ought to clearly specify the price at which the shares to be transferred ought to be sold. The sale price may be calculated and adjusted according to either the current profit level or the future profit level of the company. There are also certain cases in which the price at which the shares are to be sold is fixed beforehand. The exact details regarding this matter can typically be found within a company’s shareholders’ agreement and its clauses related to sales of shares.
Restrictions Imposed by Companies Which Are Related to Share Transfers
Certain companies in Singapore impose internal restrictions which are related to share transfers. They do so to ensure that after the shares are transferred, they do not fall into the hands of any undesirable person. Should a shareholder choose to consult the company’s board of directors with regard to the making of a share transfer, the board should inform the shareholder about the company’s regulations and restrictions regarding share transfers, should there be any. In most private limited companies in Singapore, any restrictions related to the transfer of shares are stated in the company constitution.
It is not always necessary, nor is it a legal requirement, for a shareholder of a Singapore company to discuss a share transfer with the board of directors before making the transfer. However, it is generally advisable for shareholders to do so. This is because having a discussion about the share transfer to take place will allow the members of the board to better understand the position of the company in relation to that of the shareholders.