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The Share Capital in Singapore

Updated on Saturday 27th August 2016

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Share-capital-in-SingaporeThe share capital of a Singapore company refers to the sum of money invested in the business in order to carry out its undertakings. According to Chapter 50 in the Singapore Companies Act the share capital of a company is subject to alterations such as increases or decreases if certain conditions are satisfied. The shares of a company can be separated into classes that will offer different rights to its owners. All the information about the share capital must be stated in the company’s Articles of Association.

A Singapore company’s share capital

Companies in Singapore will have an issued capital which represents the value of the shares subscribed by the company members. Companies may also have an unpaid capital which resides in issued shares which are not paid in full. The last type of share capital a company in Singapore can have is the paid capital which is the amount subscribed by the founder upon incorporation with the Accounting and Corporate Regulatory Authority.

It is also important to know that Singapore abolished the term “authorized share capital”. Another interesting fact to know is that a company may not buy its own shares or use them as a guarantee when contracting loans.

Our Singapore company formation agents can help foreign investors open companies in the city-state.

Is there a minimum share capital in Singapore?

The minimum share capital in Singapore is 1S$ and it must be deposited by all companies limited by shares. The ownership of a company is delimited by the shares. Buying shares in a company grants a person the right to receive a part of the distributed profits of a company. These profits are known as dividends. A person can subscribe for a share in a company with money or assets. The share capital is important for companies because it is the main source of money for private limited companiesSingapore has abolished the notion of authorized share capital.

Types of shares in Singapore and their attached rights

Singapore companies are allowed to issue several types of shares that can bear different conditions. The most employed types of shares issued by companies in Singapore are ordinary and preference shares. Ordinary shares are the most common shares in a company and they offer voting rights to their owners and also give variable rates of dividends. Preference shares will offer preferential rights to their owners that usually refer to the distribution of dividends. Preference shares can be redeemable which means the holder can be repaid the amount of money invested in the company at a certain date or when the company decides to repay them. The provisions about redeemable preference shares must be stated in the Memorandum or Articles of Association of the company. Shares can be freely transferred unless restrictions appear in the company’s Articles of Association.

For details about the provisions of the Companies Law regarding the share capital of an enterprise you can contact our representatives in company formation in Singapore.

 

 

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