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How to Issue Share Certificates for a Singapore Company

When forming a business in Singapore or investing in one, obtaining a Share Certificate is necessary to verify and safeguard your ownership. In this article, we’ll examine Share Certificates, a crucial component that no business owner should overlook.

What is a Share Certificate?

Once the firm has issued shares, a Share Certificate is a legal document that the corporation issues to its shareholders. Please keep in mind that paper Share Certificates are only valid for private limited companies limited by shares (“private limited company”), as shares of public limited companies limited by shares (“public listed company”) are administered by The Central Depository (“CDP”) and traded on the stock exchange.

A Share Certificate must meet the following minimum requirements:

  • State the company’s full name
  • State the company’s registration number
  • State the number of shares being issued (in numerical form and spelt in full)
  • State the shareholder’s name – to whom it is being issued to

A counterfoil may be included on the Share Certificate in some cases, which the shareholder can use to certify receipt and return to the corporation. For adequate recordkeeping, the firm should keep copies of all Share Certificates issued and keep track of its shareholders’ contact information on a regular basis.

How to Issue a Share Certificate?

The company secretary is generally responsible for the creation and issuing of a Share Certificate, just as he or she is for the company’s minutes book. The following will be noted by the corporate secretary:

  • Share Certificate number
  • Number of Shares being transferred
  • Details of the Shareholder

The Share Certificate will then be prepared by the company secretary. Only the company secretary should be in charge of drafting and keeping track of the Share Certificates that are issued. This guarantees that share ownership is clear, and the company secretary, as the custodian of the company’s records and statutory papers, can advise the business on the pertinent issues.

The company secretary will advise the firm on whether or not it may issue shares in the first place, as this is dependent on two factors:

  • Whether the directors have been given permission to issue shares under Section 161 of the Companies Act
  • If the company’s Memorandum and Articles of Association (“M&AA”) specify any procedures to be followed when issuing or allotting shares.

The registers of the company’s records will be altered by any transfer or allocation of shares. If a new allocation of shares is made, for example, the company secretary will amend the record of allotments and notify the Accounting and Corporate Regulatory Authority (“ACRA”) of the change in the company’s issued and paid-up share capital.

3 circumstances that result in the issuance of a new Share Certificate:

Transfer of Shares

A share transfer occurs when one shareholder sells or transfers his or her shares to another person or company, who then becomes the new shareholder. Following that, the initial shareholder will either stop being a shareholder, or continue to be a shareholder, albeit with fewer shares.

When the initial shareholder stops being a shareholder altogether, he or she must submit his or her Share Certificate to the business, which will then be revoked by the company secretary. The original Share Certificate will be revoked in cases where just a fraction of the shares are being transferred, and two new Share Certificates will be issued to reflect the new share distribution.

The company secretary will update the firm’s record of transfers and register of shareholders in both cases.

Allotment of Shares

An allocation of shares occurs when a business distributes new shares to existing owners. This implies that the company’s total number of issued and paid up shares will grow, while current shareholders’ shares will remain unchanged. As a result, no shares will be cancelled.

However, the business will need to convene an Extraordinary General Meeting in order to provide its directors the right to issue and allocate shares. Please keep in mind that this authorization is only valid for a limited time and must be renewed on an annual basis.

The company secretary will then amend the firm’s record of allotments and register of shareholders when the new Share Certificates are issued.

Loss of Share Certificate

If a shareholder notifies the firm that he or she has misplaced the Share Certificate, the company secretary must provide a Directors’ Resolution In Writing noting the loss of Share Certificate and confirming that the previous Share Certificate is now void and prepare a new Share Certificate.

Following that, the company secretary will make the necessary changes to the appropriate records to remove the old Share Certificate and replace it with the new one.

Need help preparing a Share Certificate? Reach out to us and our Corporate Secretarial experts will be able to walk you through the process.