Ownership changes are a natural part of running a company — from bringing in new investors to letting shareholders exit. But in Singapore, transferring company shares isn’t as simple as signing an agreement. It involves a formal process governed by the Companies Act 1967 and overseen by ACRA (Accounting and Corporate Regulatory Authority).
Getting it wrong can lead to legal issues, penalties, and invalid share transfers. That’s why many businesses rely on their company secretary to ensure every step is handled properly and on time.
Here’s what small business owners need to know about transferring shares, and how a company secretary ensures compliance and peace of mind.
A share transfer occurs when a shareholder sells or gives their shares to another person or entity, changing the company’s ownership structure.
Common reasons include:
In Singapore, share transfers are regulated to protect shareholders and ensure companies maintain accurate, legal ownership records.
Before any transfer, the company’s Constitution (or Memorandum & Articles of Association for older companies) must be checked for restrictions or conditions on share transfers. Some companies require Board approval or impose pre-emption rights (offering shares to existing shareholders first).
In most private companies, share transfers require Board of Directors’ approval. A board resolution is typically passed to authorise the transfer.
The seller and buyer must complete and sign a share transfer form (Form of Transfer), stating details such as the number of shares, price, and parties involved.
Stamp duty is payable to IRAS on share transfers at 0.2% of the purchase price or the net asset value of shares — whichever is higher. This must be paid within 14 days of the execution of the transfer form.
Once the transfer is approved and stamped, the company must update its Register of Members to reflect the new shareholder.
Private companies are not required to notify ACRA immediately upon a share transfer. However, any change in share capital (e.g., resulting from share allotment) must be filed within 14 days.
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A competent company secretary plays a critical role in ensuring the transfer is legally valid, compliant with regulations, and properly recorded.
Your secretary checks the Constitution, prepares the board resolution, and ensures all conditions for transfer are met.
They assist with calculating stamp duty, filing with IRAS, and ensuring payment deadlines are met — avoiding fines and interest.
They update the Register of Members and share certificates to reflect the change in ownership — a legal requirement under the Companies Act.
All documents, including the transfer form, board resolution, and updated registers, are filed and stored securely for compliance and audit purposes.
Your secretary can provide insight into how the transfer affects ownership percentages, voting rights, and compliance obligations — supporting informed decision-making.
Failing to follow proper procedures can lead to:
Transferring company shares isn’t just a transaction — it’s a legal process that must be handled correctly to protect your business, shareholders, and compliance status.
Your company secretary ensures that every step — from approvals to documentation and regulatory filings — is handled accurately and on time. With proper support, share transfers become a smooth process, not a compliance risk.
Worried about the complexities of switching corporate secretaries? Let Counto take the reins. Once we receive the current corporate secretary’s resignation letter, we’ll handle every aspect of the transition seamlessly. With Counto, you’re not just getting a service – you’re gaining a partner dedicated to your company’s smooth operations and compliance. Speak to us directly on our chatbot, email [email protected], or use our contact form to get started.
Here are some articles you might find helpful:
Changes to Company Details? How Your Company Secretary Handles ACRA Notifications
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Company Resolutions and Minutes: Why Accurate Records Matter
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