If you’re running a company in Singapore, issuing new shares isn’t just a matter of internal agreement. The law has a clear say in it. Specifically, Section 161 of the Companies Act mandates that companies must get shareholder approval before issuing new shares. This is typically done through an Extraordinary General Meeting (EGM).
But getting the green light from shareholders is just the start. What happens next? How do you keep everything compliant? What does the company secretary need to do? And how exactly do filings with ACRA come into play?
This guide breaks it down, step by step.
Shareholder Approval Comes First
New shares might be proposed by the directors, but they can’t just be handed out. Before anything happens, shareholders must give their approval. This is generally done during an EGM, where:
- Directors pass a resolution to call the EGM
- Shareholders get a formal notice of the meeting
- Proxy forms are prepared for those who can’t attend
- Attendance is recorded, and meeting minutes are properly noted
If shareholders approve the issuance, then the company can proceed with the allotment.
The Company Secretary’s Role Is Crucial
Once shareholders say yes, the Company Secretary has to take care of all the next steps, including:
- Drafting and recording the directors’ resolutions for the allotment
- Creating new share certificates for each person receiving shares
- Filing with ACRA through BizFile
- Updating the company’s register of allotments and register of members within 60 days
These aren’t optional tasks. Getting even one detail wrong or missing a deadline could land the company in regulatory trouble.
Filing the Allotment with ACRA: What You Need to Know
All share allotment filings in Singapore are done through BizFile, which is ACRA’s online portal. Here’s what you need to declare when filing:
- How many shares are being allotted
- Price paid or considered paid per share
- Any unpaid portion per share
- Type or class of shares involved
- Details of each shareholder (name, ID, nationality, address)
- Number and type of shares held by each shareholder
Private companies must file the Return of Allotment after issuing the shares.
Unlisted public companies can issue shares at any time but must file the return within 14 days.
Keep in mind, ACRA only allows authorised users to access and submit filings. For public companies that aren’t listed on the Singapore Exchange, only the top 50 shareholders need to be disclosed. Listed companies don’t need to provide this shareholder info.
Do You Need a Prospectus?
In general, companies offering securities in Singapore must issue a prospectus, as per Section 240 of the Securities and Futures Act (SFA).
But there’s a helpful exception. If your company is doing a private placement, under Section 272B of the SFA, you’re exempt from needing a prospectus if:
- The offer is made to 50 or fewer people in any 12-month period
- There’s no public advertising and no money spent promoting the offer
This is great news for companies raising funds quietly within a closed circle of investors.
Wrapping It Up: Why It Matters
Issuing shares in Singapore isn’t just an internal formality. There’s a clear and detailed legal process behind it.
From getting shareholder approval at an EGM, to issuing share certificates, filing returns with ACRA, and keeping your registers up to date — each part of the process must be handled carefully.
Company secretaries are the point people in this entire workflow. If they miss a filing or make an error, the company could face unnecessary compliance issues.
Before you allot any shares, make sure:
- Your shareholder resolutions are properly drafted and passed
- You understand the filing requirements and deadlines
- You know whether or not a prospectus is needed
A little planning and attention to detail go a long way in staying compliant.
Need help navigating share allotment or other corporate governance matters in Singapore? Contact us at compliance@m2kadvisors.com.
