Singapore Regulations require complying with Companies Act and filing the necessary return to ACRA during the issuance of shares. Below are the details of the issuance process.

Section 161 of the Singapore Companies Act states:

Notwithstanding anything in a company’s memorandum or articles, the directors shall not, without the prior approval of the company in general meeting, exercise any power of the company to issue shares.

Therefore, unless prior approval in a general meeting has been granted, a company’s directors may not issue shares. Depending on the composition of the company’s shareholders, different documentation will be prepared to hold the EGM. The two most common scenarios are

A) Company is wholly owned by another company or foreign corporate entity; or

B) Company is owned by several shareholders, who are individuals or corporations

For A, such companies are known as subsidiaries and their EGM will only have one participant, the parent company.

For A- The company secretary will prepare the following documentation:

i. Directors’ Resolutions in Writing (“DRIW”) to convene the EGM
ii. Notice of EGM
iii. Certificate of Appointment of Corporate Representative (if this has not been done previously)
iv. Minutes of EGM by corporate representative of holding company
v. Notice of Resolution
vi. Copy of Minutes by representative of holding company
vii. Lodgment with the Accounting and Corporate Regulatory Authority (“ACRA”)
viii. Preparation and Issuance of Share Certificate
ix. Update Register of Members

Do note that the company secretary will need to lodge items (v) and (vi) with ACRA, within the stipulated deadlines other wise requisite penalties will be levied.

For B- The company secretary will prepare the following documentation:

i. DRIW to convene the EGM
ii. Notice of EGM
iii. Proxy Forms (if necessary)
iv. Attendance List
v. Minutes of EGM
vi. Notice of Resolution
vii. Lodgment with the ACRA
viii. Preparation and Issuance of Share Certificate
ix. Update Register of Members

Similar to (A), item (vi) will need to be lodged with ACRA within the stipulated deadline, failing which, ACRA will impose penalties on the company.

Critical points to be noted while issuing shares 

 1. There is no stamp duty that requires to be paid during issuance of the shares.

2. A Valuation Report is not mandatory even if one issues shares above the book value of the shares

3.  If there is delay in lodgement of resolution the late fees shall be levied on the company. The late fees varies from SGD 50 to SGD 350 depending on the number of days for which the delay has happen

4. The new section 67 allows a company to use its share capital to pay any expenses incurred directly in the issue of new shares, and provides that the payment will not be taken as a reduction of the company’s share capital. 

5. Shareholding Agreement is not mandatory to be executed. However, it is preferable to have it during the issuance process for long term benefits. 

 

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