For many Singapore small businesses, raising capital while managing cash flow can be challenging. One solution is the option to issue Partially Paid Shares, which allows companies to collect part of the share value upfront and request the remaining balance later.
Proper handling of these shares also highlights the importance of accurate corporate secretarial services in Singapore, ensuring legal compliance and protecting shareholder rights.
Shares issued by a company can be structured as:
Fully paid shares – the shareholder pays the full amount at subscription.
Partially paid shares – the shareholder pays only a portion initially, with the remaining balance payable when the company makes a call for payment.
Key points for small businesses:
The unpaid portion is a debt owed to the company.
Ownership rights are recognised even if shares are only partially paid.
Companies have flexibility in deciding when to request the remaining payments.
For a Singapore small business, partially paid shares provide both flexibility and protection. Here’s how they work in practice:
Ownership and liability – Shareholders gain partial ownership immediately, but remain liable for any unpaid amount until it is called.
Flexible payment structure – Directors can schedule calls for payment according to the company’s cash flow needs.
Legal enforcement – If the shareholder does not pay when called, the company has rights under the Companies Act to enforce payment or forfeit the shares.
Capital management – This approach allows SMEs to raise funds in stages while maintaining control over unpaid capital.
This structure helps small businesses grow while protecting their financial interests.
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Every issuance of Partially Paid Shares must be accompanied by a share certificate, which serves as legal proof of ownership. The certificate should include:
Company name
Shareholder’s name
Number and class of shares
Payment status (fully or partially paid)
Date of issue and certificate number
Other compliance points:
Certificates must be issued within 60 days of allotment.
They must be signed by two directors or by one director and the company secretary.
No common seal is required since 2017.
Proper preparation and issuance of share certificates ensure compliance with the Companies Act and ACRA regulations while protecting shareholder rights.
Yes, Singapore small businesses can issue Partially Paid Shares to raise capital flexibly without requiring full payment upfront. Shareholders are recognised as owners immediately, but any unpaid portion remains a debt to the company until called. Accurate corporate secretarial services ensure share certificates reflect the payment status and comply with the Companies Act and ACRA guidelines.
For SMEs, partially paid shares offer a balance between securing investment and maintaining financial flexibility.
Running a company in Singapore can be challenging, but with professional support, it can be simple. Counto’s goal is to take away the complexities of compliance, and save you time and money throughout the year. To learn more, speak to us directly on our chatbot, email [email protected], or use our  contact form to get started.
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