By Vlad Cuc, specialist in company formation matters
Foreign investors seeking to become owners in companies in Singapore have various ways at their disposal for doing so. Apart from the usual methods which imply the Singapore company formation process or buying shelf companies, there is another way of owning a business in the city-state: by buying shares in a company. In order to do that, an investor must negotiate with the Singapore company selling the shares.
Below we will take a look at the share sales procedures in Singapore and the rights and obligations of the party selling company shares. Our company registration specialists can offer information on the Company Law which provides for the share capital requirements in local businesses and can also help you open a company in Singapore.
Both the seller and the buyer involved in the process of company share sales in Singapore must pay attention to a few aspects. The Commercial Code and the mergers and acquisitions legislation provide for the sale of shares in a private or a public company in Singapore. This aspect is important because public companies usually list their shares on the Singapore Stock Exchange making both the sale and acquisition of shares easier.
However, there is also the share sale process involving private companies, which requires more attention and various steps and documents to prepare. Our company formation advisors can offer information on the legislation related to selling shares in a private company.
Singapore companies which intend to sell their sales must first convene a shareholders’ meeting through which an agreement for selling a certain number of shares must be reached. This is a necessary because the legislation provides for certain requirements related to the increase or decrease of the share capital in a Singapore company.
Following that, the seller and buyer will agree on the price of the shares package to be sold and draft the documents related to the transfer of shares.
The representatives of a Singapore company selling shares must prepare a set of documents related to the process. These documents are:
With respect to the sale-purchase agreement which is the most important document when selling the shares of a Singapore company, it can be drafted by either of the parties involved in the transaction.
For assistance in company share sale transactions, do not hesitate to contact our company formation consultants in Singapore. Please note that we can also help open a company in Singapore.