Existing Singapore Company Transfer
Life is uniformly changing and your company will face changes in the future. As a company owner, having a well-planned exit strategy will help you to handle change [that will influence your company’s success] efficiently. As such, many agreed that every company owner should have an exigency plan with steps that need to be taken when there is a transfer of company ownership.
Let us consider this scenario as an example: You have made the choice to retire or sell your company. Selling your company or transferring the company ownership depends upon not only your business’ corporate formation but also the nature of the change of ownership. As such, it is necessary to have an exigency plan as well as to have a better knowledge of how to transfer company ownership.
Ownership transfers of companies in Singapore differ based on the company entity which is to have its ownership transferred. Owners of sole proprietorships, partnerships, also private limited companies transfer their ownership of such entities in diverse ways.
- Transferring Ownership of a Sole Proprietorship or Partnership
- Transferring Ownership of a Private Limited Company
For Sole Proprietor or Partnership
If you intend to transfer company title, or if there are any modifications to the particulars of the Sole-Proprietorship or Partnership, you (sole-proprietor/partner or authorized delegate (if any) ) must lodge the changes with the Registrar online through BizFile+ using SingPass or CorpPass within 14 days from the date of the change. Delayed notification [of changes] will face a penalty.
Changes like changes in company address, company name, also company activity do not need any endorsement or approval. Though, there are specific changes that require approval or endorsement, for example, the addition or removal of the partners. The endorsement must be obeyed within 14 days from the first submission date. The form will lapse and the transaction will be rejected if the expected endorsement is not done within the 14 days. In this case, the sole-proprietor/partner or authorized delegate have to re-submit a new transaction also repay the filing fee again
Guide for Sole Proprietorship Company Registration
While it comes to company structures in Singapore, the sole proprietorship is the simplest business entity application to work with. Simply keep in mind, that this entity option is only suitable for small companies because it only requires a single owner. Also because it is an individual ownership kind of business, you will have no confined liability protection and your assets will not be preserved from any business risks that you may face during the course of your company.
What you require to know about Sole Proprietorship
Before getting started on anything new, it is always good to have all the details in hand so you can make an informed decision. Here are some things you require to remember what it means to hold a sole proprietorship business:
The sole proprietorship is not a separate lawful entity, so there is no difference between the owner and the proprietor
Individual proprietorship requires you to be 18 years of age before you can register
A sole proprietorship must have one manager who is 21 years of age also a resident in Singapore
A sole proprietorship must have a local company address
A sole proprietorship held by Singapore residents can only be done if the residents’ Medisave accounts have adequate funds in them
Profits under this entity are handled as the income of the owner
A sole proprietorship cannot register another company because it is not deemed a legal entity
Accounts under this entity do not require to be audited
No annual returns require to be filed with the ACRA
Registration of this kind of company entity requires to be renewed annually
This choice is best adapted to locals, not immigrant investors
What documents you will require to register a sole proprietorship
Registering a sole proprietorship will need an investor to have the subsequent documents prepared:
A suggested name for the proposed company
A summary of the business activities
A local address for running the company
A copy of the owner’s Singaporean ID
A local address for the citizen
An agreement declaration also Statement of Non-Disqualification
Once a sole proprietorship company has been successfully registered, only then a bank account for the company can be opened. The selections for the bank account can be from any of the numerous international, foreign, or local banks that are established within Singapore such as DBS, OCBC, UOB – Comparison of Local banks.
These company bank accounts can be opened as separate accounts of multiple currencies or have the choice of opening as a single multi-currency account, depending on the decision of the owner.
For Partnership Company
Usually, a company can present in four kinds. One of them that is possible is Partnership. A partnership is created when two or more persons carry on a business in common with a thought of making a profit. The maximum number of partners allowed in a partnership is 20, which can be both individuals or bodies of corporate.
Since the partnership was not treated as a separate legal entity of its partner according to the law, therefore the partners collectively hold the assets of the partnership also are each individually liable for the debts plus liabilities of the partnership, including liable for the full amount of debt owing by the partnership without any limit. Yet, this does not apply to the partnership established solely or mainly for the objective of carrying on any profession that is regulated by other legislation, such as law firms, accounting firms, medical practices, etc.
Anyone who wishes to carry on business in Singapore by a partnership must register their company under the Business Registration Act (Cap 32), also comply with the requirements under the Act.
For a company that intends to transfer business ownership, stamp duty will be imposed on the document signed during possession. The stamp duties are needed to be paid to the Inland Revenue Authority of Singapore (“IRAS”) when shareholders want to transfer shares. In any transaction [that has a transfer of shares], there will be a “transferor” plus a “transferee”. Please note that a transferor applies to the existing shareholder who is delivering up the share, while the transferee is the new shareholder who will be receiving the share.
The duty is payable on the original price or value of the shares, whichever is higher. The average price on the Stock Exchange of Singapore will be considered as the value of the shares [transferred]. The latest average price of the shares can be utilized if there is no available average cost as of the date of the document.
As private businesses, the net asset value (NAV) or the allotment price of the shares in the target company will be taken as the value of the shares transferred. In the situation when there are diverse classes of shares (e.g.: preference shares in the target company), the NAV will depend on the rights assigned to the particular class of share.
If you are intending to transfer company ownership or shares, Capital Radius can help you with a thorough guide to the procedures including the process for a transfer of shares.
Feel free to reach out to us today!
Frequently Asked Questions
Answers to some common questions
For more, refer to our Nominee Director article.
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