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A Singapore private company issues new shares by getting shareholder approval, letting the directors fix the terms and filing a return of allotment with ACRA, the Accounting and Corporate Regulatory Authority. ACRA charges no fee for the filing. Facts below were checked on .
What is a share allotment?
An allotment is the company creating and giving out new shares. ACRA says a company can allot shares for cash, which raises its total share capital, or for other considerations. Examples are fulfilling a contract, meeting a provision in the constitution, or exchanging shares for dividend payments owed to a shareholder.
After an allotment, the company usually has to update two things with ACRA: its share capital and its shareholding. The filing does both.
Who has to approve a new issue?
Shareholders. ACRA says you must get approval through a general meeting before allotting shares, and that applies even if your constitution says directors can decide on allotments. Once the general approval is in place, directors set the number of new shares, the terms and the price. Those decisions must comply with section 161 of the Companies Act.
Keep the minutes and the resolution, since you upload the resolution if you have not filed it before. The company secretary normally handles that, see corporate secretary.
What does it cost and how long does it take?
| Item | ACRA position |
|---|---|
| Return of allotment of shares | Free |
| Approval | Immediate |
| Who may file | Director, company secretary or a corporate service provider |
Real costs sit around the filing: a lawyer or provider to draft resolutions, subscription agreements and share certificates, plus any valuation advice. ACRA sets none of those prices. The company formation cost page shows how ACRA fees compare with provider fees for setup.
What details does ACRA want?
Prepare the company's UEN, the date of allotment, the number of shares, the issued share capital, the amount paid or deemed paid on each share, the unpaid amount, and the class and sub-class of shares. For a private company you list all shareholders. For each new shareholder give the full name, identification number, nationality, contact address and the number and class of shares held. The contact address cannot be a P.O. Box, and it must be in the same country as the residential address.
For non-cash allotments, attach the relevant documents, such as the contract or a court order. A copy of the resolution is also a supporting document.
When does the issue take effect?
For private companies, the allotment takes effect on the date you file, once the Electronic Register of Members is updated. Public companies must file within 14 days of the allotment date. Until you file, the new holder is not on the register.
What are the steps on Bizfile?
Log in as a business user with Corppass, pick Update shares information and choose Return of allotment of shares. State whether you filed the general meeting resolution, and if not, enter the meeting date and upload it. Then choose the currency and how the shares are payable, select the share class, add any new shareholders, and enter each allotment, either individually or by group. The total paid-up share capital for each class must match what you allot across holders. Review, confirm and submit. See Bizfile for the portal basics.
What limits and mistakes should you watch?
- The 50 shareholder cap. A private company cannot go above 50 shareholders. Bizfile asks you to confirm you stay within it.
- No approval first. A board resolution alone does not replace the general meeting approval ACRA asks for.
- Mismatched totals. Paid-up capital across holders must add up to the amount allotted for that class and currency.
- Treasury shares in the wrong class. ACRA says treasury shares can only be added under ordinary shares.
- Wrong class of shares. Pick the class on the form to match what the resolution approved, and check the constitution before the meeting.
Check the numbers on the form against the signed resolution before you submit, since a wrong entry is the usual cause of later fixes. If you are unsure, take ACRA's advice and ask a corporate service provider to file. A wrong share filing can need a Notice of Error or a court order to fix.
How does a new issue affect current shareholders?
Every new share shrinks the percentage held by people who do not buy any. If a founder owns 60 of 100 shares and the company issues 100 more to an investor, the founder holds 60 of 200, which is 30%. Agree the price, the class and any rights in writing before the meeting. Agree who votes, because the approval comes from the shareholders and not only from the board. If the incoming investor will also sit on the board, see change a director.
What about moving existing shares?
New issue and transfer are different. A transfer moves shares already in issue between people and attracts IRAS stamp duty. See transfer shares. For setting up the share structure in the first place, see private limited company.
Independent guide
SingaporeCompanySetupGuide.com is an independent guide and not ACRA. Partners pay us for referrals. If you want a provider to prepare the resolutions and file the allotment, use the quote form on this page. We pass your request to suitable firms, which reply with their own prices.
Sources
- ACRA, Filing a return of allotment of shares, https://www.acra.gov.sg/manage/companies/shares/allotment-of-shares/ (approval, documents, fee, timing, steps, shareholder cap)
- ACRA, Updating company information, officers and shareholders, https://www.acra.gov.sg/manage/companies/legal-requirements-common-offences/maintaining-local-companys-information-registers/updating-company-information-officers-shareholders/ (shares information, 14 days)
