In the bustling economic landscape of Singapore, understanding the nuances of share certificates can offer investors and companies alike a competitive edge. This blog will delve into the concept of share certificates within Singapore’s dynamic market, exploring its significance, legal framework, and practical implications for company owners, as well as both existing and prospective shareholders.
What is a Share Certificate?
A share certificate is a legal document that stipulates the number of shares held by an individual or entity and provides key details about the shareholder’s rights and obligations. The document certifies registered ownership of shares from a particular date.
Singapore’s Companies Act governs the issuance and management of share certificates, with specific provisions outlined in Sections 93 to 98. Under these regulations, a company must issue share certificates within two months of its incorporation or within one month if there is a subsequent transfer of shares.
What Information Do Share Certificates Contain?
The information shown on a share certificate includes:
- Company Name
- Company’s Registration Number
- Company’s Registered Address
- Shareholder Details
- Number of Shares Issued and Share Class
- Shareholder Rights
- Date of Issue
- Unique Certificate Number
- Signature
- Transfer Restrictions
Since March 2017, companies and limited liability partnerships are no longer required to affix a common seal on share certificates. Instead, certificates must be signed by either two directors or by one director and a company secretary.
Types of Share Certificates
Share certificates in Singapore come in these two forms:
- Physical share certificates
- Electronic share certificates
The decision to use physical or electronic share certificates depends on the company’s and shareholders’ preferences and needs. Both options are legally valid in Singapore if they adhere to the relevant regulations.
Types of Share Classes
There are generally two types of share classes:
- Ordinary shares
- Preference shares
The share class is usually indicated in the share certificate. Other share classes, such as redeemable shares and management shares, may be reflected on the share certificates depending on whether the shares are issued.
If a private company wants to issue different share classes, it can do so in accordance with an ordinary resolution. However, a public company cannot issue different share classes unless the issue of those classes, and the rights attached to those classes, were provided for in the company’s constitution.
Fully Paid vs Partially Paid-up Shares
Fully paid-up shares are what a shareholder has already fully paid for before the company issues the shares. The opposite refers to when the share value is only partly paid for and the unpaid portion remains because of the company. Shares need not be fully paid-up before they are issued; hence, the share certificate should state whether they have been fully paid-up.
How Do I Get a Share Certificate?
A company secretary is responsible for preparing share certificates in Singapore. Before that, the necessary documents, such as the company constitution and shareholder details must be provided. These documents are evidence of ownership and provide accuracy when the share certificates are issued.
Afterward, the company secretary fills out a share transfer form that outlines information such as the name of the shareholder, number of shares issued, and other key details.
After completing the forms, they must be submitted to the Accounting and Corporate Regulatory Authority (ACRA) within 14 days from issuance. ACRA will review the forms and issue an electronic copy of the share certificate.
After receiving the electronic copies, physical copies of the share certificates must be printed out for distribution to shareholders or to be kept on file for future reference.
When Are Share Certificates Issued?
Share certificates are usually issued on three occasions, during:
| Type of Situation | What it Involves |
|---|---|
| Allotment of Shares | A company typically issues new shares to new or existing shareholders to boost its share capital.
After obtaining approval from the board of directors in a general meeting, the company secretary must prepare the relevant documents, lodge the record with ACRA within 14 days, and prepare the new share certificate with details of the shares allotted. |
| Transfer of Shares | A shareholder can transfer or sell their shares to an individual, corporation, or back to the company, either in whole or partially.
If a transfer happens, the shareholder no longer remains a shareholder. In the latter scenario, he stays a shareholder but has fewer shares. The company secretary must prepare the board resolution, Instrument of Transfer, and the stamp duty acknowledgement from the Inland Revenue Authority of Singapore (IRAS). The secretary must also lodge the record with ACRA before cancelling the original share certificate and preparing a new one. If a portion of shares are being transferred, the original certificate will be replaced by two new share certificates – one for the transferor and another for the transferee. |
| Loss of Share Certificate | If a shareholder loses a share certificate, they must inform the company by submitting a statutory declaration. The company secretary will provide a duplicate copy of the share certificate after preparing a board resolution to record the loss and cancel the previous certificate.
If the share value is over S$500, the shareholder faces additional requirements, such as publishing an advertisement in the newspaper stating:
|
There can only be one share certificate provided for all shares issued or transferred unless the shareholder requests separate certificates.
There is a time limit that must be adhered to. The limit depends on whether the certificate is issued after the allotment of shares or the transfer of shares.
For the first scenario, the share certificate must be delivered to the shareholder within 30 days from the date that the transfer was lodged with ACRA.
Get Guidance on Your Company Share Certificates With InCorp
As a business owner, it is important to gain knowledge and understanding of a share certificate. As we have covered above, this document serves as evidence of your shares in the company and acts as a legal document for certain business transactions.
At InCorp, we understand the value and significance of this document for business owners and shareholders. Our corporate secretarial service provides strong guidance in this aspect and beyond. Get the help your business needs when you outsource to us today!
FAQs about Share Certificates for Singapore Companies
- In Singapore, share certificates are not legally required but are commonly issued as proof of ownership of shares in a company. While the Companies Act does not mandate the issuance of share certificates, many companies still provide them to shareholders as a formal acknowledgment of their shareholding.
- Preparing and issuing a share certificate in Singapore involves several steps. Contact our corporate secretarial team to get started!
- In Singapore, a company is required to issue a share certificate to a shareholder within 60 days of the allotment or 30 days after the transfer of shares, as outlined in the Companies Act.
Engage our corporate secretarial service today!
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