In many countries, before any allotment can be made, you will need to check the authorized capital of the company to ensure that the allotment will not beach the authorized capital limit. But here is the good news in case you didn’t know- the concept of authorized capital has been abolished in Singapore and Singapore registered companies are allowed to increase their capital to any limits merely by way of allotment.
IMPORTANT STEP BEFORE ALLOTMENT: authority to issue shares (don’t skip this)
- A resolution needs to be passed by the shareholders of the company giving authority to the directors of the company to issue shares.
- Technically this amounts to an Extraordinary General Meeting (EGM) which can even be convened by written means(deemed EGM). Such EGM or deemed EGM will require a directors resolution to convene such EGM and the resolutions of the shareholders meeting.
- A notice of resolution/minutes by representative of holding company needs to be lodged with ACRA via bizfile website for this authority to issue shares to directors.
- Please note that such authority to issue shares is valid only up to the time next Annual General Meeting(AGM) or the last day by which the AGM is supposed to be held.
Documents required before filing of return of allotment:
Apart from above mentioned directors and shareholders resolution for authority to issue shares, following other documents shall be required before allotment of shares can be filed with ACRA:
- Directors resolution for allotment of shares
- Share application form
- Written waiver of preemptive rights from shareholders, if the allotment is not made to existing shareholders in existing shareholding ratio
- Proof of deposit of allotment monies in to company’s bank account. I shall be writing separate post about shares allotted for consideration other than cash.
Filing of return of allotment of shares with ACRA :
Any Director or Company Secretary can file return of allotment of shares with ACRA via bizfile website if the incoming shareholder is local resident in Singapore (citizen/PR/employment pass holder). Such person will thereafter need to login with his singpass to ACRA website to endorse his appointment.
If the incoming shareholder is a foreign individual or a local resident not having singpass, you will need to get the services of any ACRA authorised corporate services provider to file the return of allotment on behalf of the company.
Once the return of allotment has been filed with ACRA, remember to issue share certificates for the shares allotted and don’t forget to affix common seal of the company on the share certificates.
If need any further advice in this regard or you wish to get a professional quote for allotment of shares in your Singapore Company, you may fill in contact form below and I will surely be able to help you accordingly: