How to Decide Your Singapore Business’ Shareholder Structure

When deciding whether to incorporate a private limited liability company in Singapore, it is helpful to understand the structure and attributes of this corporate form. 

In other words, this is where you get to select the types of shares you’ll be handling, the corresponding share transfer rules, plus the company’s administrative liabilities, tax rates, scalability, and, of course, the accompanying compliance responsibilities. 

So, all in all, there’s a lot at stake here. A poorly informed decision could be detrimental to the survival of your business over the long haul. Company law is not exactly the easiest thing to grasp. Luckily for you though, you’ve just stumbled upon the most comprehensive guide to all the primary types of companies in Singapore. 

Splitting the Pie with Your Shareholders

The first obstacle to conquer is how to divide the shares between the company founders. Naturally, the CEO should get a bigger percentage. That will give them a larger portion of shares but this would also require them to manage the company on a daily basis. 

An alternative approach is to decide based on the capital invested. The person who invested the most would receive the most shares. It’s also possible to discuss with the major investors. For example, if they do not want to participate in daily management, preference shares are a smart choice. They secure the desired profit distribution priority but not the same voting rights.

Finding Your Paid-Up Capital

This capital is the initial investment for your company’s development. You can invest as little as , but realistically you will need much more to give your business credibility and a solid foundation. A good amount to start your investment would be at S,000. 

Once you have the paid-up capital amount, you can decide on the price per share. Although you can change the price based on share types, you can also use the same price for all classes. For example, the cost per share can be .

In this example, you might issue 5,000 shares for each. You can divide them among the stakeholders according to the money they want to invest. Remember to keep track and monitor the amount of allocated shares to each investor. This ensures transparency in the company and increases trust among the business’ shareholders.