You must provide share certificates during your company’s initial incorporation in Singapore. If your firm expands, you may also want to sell some of your company’s shares to raise additional funds to cover operating expenses. You must issue share certificates in such cases.

In this post, we will explain when share certificates are required and why you may need a share registrar.

Share certificates: what are they?

Share certificates are legal documents. They specify the number of shares a person or organization owns. They also include key information on the rights and responsibilities of shareholders. The certificate attests to the registered ownership of shares as of a specific date.

Sections 93 to 98 of Singapore’s Companies Act contain detailed regulations. They govern the issue and administration of share certificates. A firm shall issue share certificates in accordance with these requirements within two months of its incorporation or within one month if shares are transferred later.

Singapore businesses must issue share certificates correctly and consistently. A share registrar helps with tasks like processing transfers, issuing share certificates, and keeping registrations up to date.

What data is included in share certificates?

The following details are displayed on a share certificate:

• Name of the Company
• The company’s registration number
• The registered address of the business
• Details of shareholders
• Rights of shareholders by share class and number of issued shares
• Date of publication
• Special certificate number
• Limitations on signature transfers

Share classes

A share certificate typically indicates the share class. Typically, share classes come in two varieties: Ordinary shares and preference shares. The share certificates may show other classes, like management shares and redeemable shares. This depends on whether the shares are issued.

A private business may issue various share classes in compliance with a standard resolution. A public corporation, however, is not permitted to issue distinct classes of shares. This is unless the company’s constitution specifically addresses the issuance of such classes and the rights associated with them.

Partially paid-up versus fully paid-up shares

A shareholder’s fully paid-up shares are those that they have already paid for in full before the firm issues them. The reverse occurs when the firm keeps the unpaid half of the share value after it has been partially paid for.

The share certificate should specify whether the shares have been fully paid up. However, shareholders don’t have to fully pay for the shares they have bought upfront.

How to obtain a share certificate

In Singapore, a company secretary prepares the certificates. The required paperwork must be submitted first, including the shareholder list and the company’s constitution. These records are proof of ownership and accuracy at the time of the issuance of share certificates.

The company secretary then completes a share transfer form. This includes the shareholder’s name, the quantity of shares issued, and other important information.

The Accounting and Corporate Regulatory Authority must receive the completed forms within 14 days of their release. After examining the paperwork, ACRA will provide an electronic copy of the share certificate.

Finding a reliable corporate secretary to manage all of your company’s crucial records can be challenging. This is true, especially if you’re a new business owner. Corporate experts like Boardroom can assign a committed and skilled secretary to meet your needs. This allows you to concentrate on running your business rather than worrying about share compliance.

After obtaining the electronic versions, you must print hard copies of the share certificates. Then, you can issue them to shareholders or store them for future use.

When are share certificates issued in Singapore?

Certificates of shares are typically issued 3 times during:

Distribution of shares

To increase its share capital, a business usually issues additional shares to both new and existing shareholders. The company secretary must compile and submit the necessary paperwork to ACRA within 14 days after receiving the board of directors’ approval at a general meeting. They must create a new share certificate that includes information on the shares that have been allocated.

Share transfer

A shareholder may sell or transfer all or a portion of their shares to a corporation, an individual, or back to the company. In the event of a transfer, the shareholder loses their ownership stake. In case of a sale, the shares are reduced, but the individual remains a shareholder.

The company secretary is responsible for preparing the stamp duty acknowledgment from the Inland Revenue Authority of Singapore (IRAS), the board decision, and the instrument of transfer. Additionally, they must file the record with ACRA before canceling the original share certificate and creating a new one.

Suppose a portion of the shares are being transferred. In that case, two new share certificates will replace the original one. This is one for the transferor and one for the transferee.

The loss of the share certificate

A shareholder is required to file a statutory declaration to the firm informing it of the loss of a share certificate. Once a board resolution has been prepared to reflect the loss and invalidate the prior certificate, the company secretary will produce a duplicate copy of the share certificate.

Additional obligations for the shareholder arise if the share value exceeds S$500, such as placing an ad in the newspaper that announces:

• The loss of the share certificate and that the owner will apply for a new one within 14 days.
• A bond equal to the shares’ current market value will be issued to protect the business from any losses in the event that the misplaced certificate is produced.

Is your share certificate issuing subject to a deadline?

Yes. The deadlines are as follows:

• 60 days after the shares are distributed
• Within 30 days of the secretary submitting the share transfer to ACRA

Keep in mind that failure to meet these dates is illegal under the Companies Act. The impacted businesses and employees are deemed to be at fault and could be subject to a default penalty or a fine of up to $1,000.

Conclusion

Ensuring timely issuance and delivery of all share certificates to shareholders is crucial. You can engage a qualified share registrar if you have any concerns about the share issuance procedure or are having trouble locating a reliable and knowledgeable company secretary in Singapore. They will be happy to help!