A Guide to Share Certificates – Issuance and Details of the Share Certificates
When you own shares in a company, you’re issued with a share certificate in Singapore as proof of that membership. Share certificates are issued by the company to all shareholders.
In a share certificate, the document will state the number of shares issued by the company and on what date. Share certificates are only issues by private limited companies. If a company is listed publicly, they issue electronic share certificates which will be transferred to the shareholder’s Central Depository (CDP) account.
Share certificates in Singapore are issued by the Company Secretary. The Company Secretary is responsible for all compliance matters relating to the company. Each certificate contains a unique, distinguishing number which is recorded in the registrar or members. The certificates must also be signed by two directors. In the case of a company with a single director, the director and Company Secretary will sign the certificate.
Details Contained in Share Certificates
Share certificates are issued under the company’s common seal or official seal of the company. Share certificates in Singapore will contain the following details:
- Date the certificate was issued.
- Company name/authority which the company is constituted.
- The company’s registered address in Singapore (or branch office address).
- The share class (partly paid, wholly paid or unpaid shares).
As of 31 March 2017, however, companies and LLPs (Limited Liability Partnerships) will not need to use the common seal any longer. A signature of an authorised person will be sufficient.
Issuing of The Share Certificates
A share certificate in Singapore is issued when the company is incorporated, and subsequently during the allotment and transfer of shares.
- Allotment of Shares – This is often done to raise more share capital. The company distributes the shares, which result in an increase in the total number of paid-up and issued shares. Shares can be sold to new or existing shareholders. Section 161 of the Singapore Companies Act stipulates that the board of directors must approve before the shares can be distributed. Upon issuance, the Company Secretary will prepare a Director’s Resolution in Writing (“DRIW”) to record this allotment. The Secretary will also lodge this record with the Accounting and Corporate Regulatory Authority (ACRA) with a “return of allotment”. This must be done within 14 days. The Singapore Company Secretary will then proceed to prepare the new certificates. Do note there is a time limit on the issuing of shares once a lodgement has been made with ACRA.
- Transfer of Shares – A shareholder may either sell or transfer their shares/title to either someone else, or back to the company directly. They may do so partly, or wholly. This process is the transfer of shares, and there could be several reasons why they occur. For this to happen, the Company Secretary must prepare the DRIW to record this transfer, what the transfer instrument used is, and prepare the stamp duty acknowledgement from IRAS (Inland Revenue Authority of Singapore). The Secretary will then commence with a lodgement to ACRA, cancel the original share certificates and prepare the new one. As with the allotment of shares, there is a time limit once a lodgement has been made with ACRA.
Return of allotments contain the subsequent information:
- How many shares are allotted.
- Amount paid, deemed paid or unpaid.
- Classification of the shares.
- Number of shares held by the company’s members.
- Details of the shareholders (full name, nationality, identification and address)
As per the Singapore Companies Act, the time limit for the completion and delivery of share certificates in Singapore is as follows:
- Allotment of shares – Within 60 days
- Transfer of shares – Within 30 days from the notice date of transfer lodged with ACRA.
Failure to comply with the time limit requirement is considered an offence, which the company and every company officer will be found guilty of. The penalty is a fine not exceeding S$1,000 and a default penalty.
What to Do If Your Share Certificate Is Lost or Destroyed?
Should this happen, the Company Secretary can provide you with a duplicate copy of your share certificate. A duplicate can be issued after a statutory declaration is received. This declaration must state that the certificate has either been destroyed or lost, and not sold or otherwise disposed of.
If the value of your share certificate exceeds $500, you may be asked to place an ad in the newspaper which states the certificate is either lost or destroyed, and that you intend to apply for a new one. This must be done before you can apply for a duplicate replacement. The Company Secretary will still need to prepare a DRIW to record the replacement and declare that the previous copy is void once the duplicate has been issued.