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Singapore Company Incorporation FAQs

Frequently Asked Questions about Singapore Company Formation

TOP FAQs

  • What are Private Companies?

    Maximum number of shareholders is limited to 50 and the memorandum and articles of association restricts the right of its members to transfer their shares in the company.

     

    A private company limited by shares can be classified as a exempt private company.

    The key characteristics of an exempt private company is:

    • No more than 20 shareholders; and
    • All the shareholders are individuals.
    • Exempt private companies with an annual revenue of less than S$5 Million are exempted from audit requirements and are not required to file financial statements with the ACRA.

    It is also exempted from prohibitions against loans to its directors or to companies related to its directors.

  • What is a company?

    A company is a business entity registered under the Companies Act, Chapter 50. Most companies in Singapore are private companies limited by shares and are recognized by the suffix “Pte Ltd”.

  • Does a Singapore subsidiary require a registered address in Singapore?

    Yes, all Singapore companies and subsidiaries need to have a registered address in Singapore.

  • What is the difference between a director and a shareholder?

    Shareholders
    own the company and are entitled to the profits of the company.

    Directors
    managing and overseeing the company operations, dealing with the everyday responsibilities.

  • Who is ordinarily resident in Singapore?

    A Singapore citizen, Singapore Permanent Resident or EP holder who is residing in Singapore.


Shareholders

Does a director have to be a shareholder and vice versa?


No, directors are not required to own shares in the company but they are permitted to. Similarly, a shareholder does not have to be a director but is permitted to be appointed as such.

Does a director have to be a shareholder and vice versa?


No, directors are not required to own shares in the company but they are permitted to. Similarly, a shareholder does not have to be a director but is permitted to be appointed as such.

What is a shareholder?


A shareholder is the owner of a company limited by shares.

If there is more than one shareholder each owns a representative portion of the company.

Shareholders are entitled to receive their portion of the company’s profits.

Who can be a shareholder?


Anyone can be a shareholder, including another company – known as a corporate shareholder.

What is the minimum and maximum amount of shareholders permitted?


A private company limited by shares must have at least one shareholder and no more than 50 shareholders.

What is the difference between a director and a shareholder?


Shareholders
own the company and are entitled to the profits of the company.

Directors
managing and overseeing the company operations, dealing with the everyday responsibilities.

Can a shareholder also be a director?


Yes, there are no restrictions prohibiting an individual assuming both roles.

What is a Share?


A share is a unit of ownership interest in a company.

Are there different types of shares?


Yes, There are 2 types of Share

 

1. Ordinary shares
Most companies have just ordinary shares. These shares entitle the holder:

  • 1 vote per share
  • Participate equally in dividends
  • A share in the surplus capital (if the company is wound-up)

 

2. Preference shares
These shares have preferential rights over ordinary shares, usually in respect of dividends. 
e.g. fixed amount of dividend, or alternatively, participating in profits beyond the fixed dividend under a fixed formula.
These shares may also be given priority on return of capital on winding-up (but not entitled to share in surplus capital).
Often, preference shares are non-voting, and can be redeemable.

What is the Value of a Share?


A share has a nominal value and an actual value (or market value)

 

  • The nominal value is the amount that the shareholder paid for the share.
  • The actual value will vary from this amount and depends on the value of the company and the market conditions.

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