Before forming a company in Singapore you will need at least one shareholder. Before choosing one, there are some things you need to be aware of. Here are some of the most commonly asked questions about shareholders when you are starting the process for company incorporation Singapore how to register a company in singapore.
What Exactly Is A Shareholder?
A shareholder is personal that is entitled to part of the profits of a company. What this means is that owners tend to be shareholders. However, if you have individuals that have invested in your company who you plan on paying back with some of the profits, you can make them a shareholder as well. Just remember though that each shareholder technically owns a portion of your company. Even another company can be a shareholder. They are what you would call a “corporate shareholder”. It’s not uncommon for subsidiary companies to have both individual and corporate shareholders.
What Are The Minimum And Maximum Amount Of Shareholders Allowed?
Each company must have at least one shareholder. Companies, that are private and limited by shares, can have a maximum of 50 shareholders. As the business owner, it’s up to you to decide how many shareholders you would like your company to have. Just remember though that each shareholder technically owns a portion of your business and is entitled to your profits. So even if each shareholder only owns 2% of the business, this can add up to a lot of money, especially if you have the maximum amount of 50 shareholders.
Can A Shareholder Be A Director As Well?
Shareholders and directors have to different responsibilities. Directors run the company and are responsible for day to day operations. Shareholders are basically owners of the company who are given some of the profits. However, a shareholder can be a director and vice versa. As long as the shareholder is at least 18 years of age and a local resident of Singapore, they can be a shareholder as well. If one individual can handle both roles, then there aren’t any real restrictions on them doing both as long as they meet the requirements as set forth by ACRA.
Is It Possible For Shareholders To Own Different Amounts Of The Company?
Shareholders can own different amounts of the company. In fact, the majority of companies, with more than one shareholder, will designate different amounts that each person owns. For example, it’s possible to have three shareholders with one person owning 50% of the company while the second person owns 40% and the third person owns 10% of the company. With the amount of the company that each person owns comes their voting rights. What this means is that the vote of individuals that own less of the company will have lesser value than those that own more. This is why it’s important as an owner to be aware of how much each person owns of the company as it can have a larger impact besides that of just profits that need to be shared.