Share Capital Changes: Issuing or Transferring Shares in Singapore

Posted by Mayang on May 9th, 2025

Running a Singapore company may require adjusting your shareholding structure. Whether it’s bringing in investors, parting with a partner, or funding expansion, share capital changes are common.

The two primary methods are issuing new shares or transferring existing ones. Both require legal compliance, accurate ACRA filings, and the expertise of your company secretary or corporate secretarial services provider.

Here’s the guide.

Understanding Share Capital

Share capital is the total value of shares issued to a company’s shareholders. In Singapore, ordinary shares are standard, though preference shares are also available.

All private limited companies must issue at least one share at incorporation. Post-incorporation, you can issue more shares or redistribute existing ones. Changes must be logged with ACRA (Accounting and Corporate Regulatory Authority).

Reasons for Share Capital Changes

Businesses adjust share capital for several purposes:

• Securing investment from stakeholders
• Adding new shareholders or co-founders
• Allowing a shareholder to exit
• Realigning shares for tax or regulatory compliance
• Offering equity as employee incentives

The method—issuance or transfer—depends on your goal.

Issuing New Shares

Issuing new shares creates additional shares to allocate, often for investment or services.

Steps:

1. Examine your constitution: Does it permit new share issuance? Any restrictions? Most Singapore companies use the Model Constitution, allowing issuance with shareholder consent.
2. Secure approvals:
   • Draft a board resolution to propose the issuance.
   • If needed, hold an extraordinary general meeting (EGM) for shareholder approval.
3. Allocate shares:
   • Set the number of shares and issue price.
   • Collect payment, if applicable.
4. Update records:
   • Revise the register of members.
   • Issue share certificates.
   • File a Return of Allotment of Shares (Form 11) with ACRA within 14 days.
5. BizFile+ update (optional): Changes automatically reflect in your ACRA profile.

Notes:

• Singapore imposes no minimum paid-up capital, but you must disclose the payment for new shares.
• Unauthorized issuance risks legal disputes or reversal.

Transferring Shares

Transferring shares shifts existing shares between shareholders, often during exits or reorganizations.

Steps:

1. Verify restrictions:
   • Pre-emption rights may prioritize existing shareholders.
   • Check your constitution or shareholders’ agreement.
2. Prepare documents:
   • Complete a share transfer form.
   • Set the transfer price, if applicable.
   • Stamp the form, if needed.
3. Pay stamp duty:
   • Transfers incur a 0.2% duty on the higher of purchase price or market value.
   • File with IRAS within 14 days.
4. Board approval:
   • Pass a resolution to endorse the transfer.
5. Update records:
   • Amend the register of members.
   • Issue a new share certificate.
   • Cancel the old one.
6. Notify ACRA via BizFile+.

The Company Secretary’s Role

Singapore law requires appointing a company secretary within six months of incorporation. The company secretary or corporate secretarial services provider ensures smooth share capital changes by:

• Guiding compliance with the Companies Act.
• Preparing resolutions and EGM notices.
• Filing with ACRA and IRAS.
• Maintaining the share register and issuing certificates.

Without an in-house secretary, corporate secretarial services are essential to avoid fines, delays, or disputes.

Issuing vs. Transferring: Snapshot

Additional Notes

1. Deadlines: ACRA’s filing timelines are strict. Missing them risks penalties or director liability.
2. Valuation: Share values must be justifiable for transfers or investor deals to meet IRAS scrutiny.
3. Tax: IRAS may assess transfers for undervaluation or gains tax. Seek tax advice.
4. Records: Thorough documentation is key for audits or regulatory reviews.

Closing Thoughts

Adjusting your share structure in Singapore is straightforward with diligence. Ensure:

• Compliance with your constitution.
• Proper approvals.
• Timely, accurate filings.
• Stamp duty payment, if required.
• Updated records.

Your company secretary or corporate secretarial services provider is vital for compliance and risk mitigation. In shareholding, the paperwork is as crucial as the deal.