An allotment of shares is when a company issues new shares in exchange for cash or otherwise. Such allotment of new shares increases the company’s share capital. Private companies can allot new shares only after filing the “Return of Allotment of Shares” transaction via BizFile+. Public companies limited by shares can allot new shares anytime and must file the “Return of Allotment of Shares” transaction within 14 days from the date of allotment.
The company’s constitution may give its directors the power to decide on the number of new shares to be issued, the terms which they will be issued and the price subject to compliance with Section 161 of the Companies Act. However, regardless of what is provided in the constitution, all company directors must first seek approval through a general meeting before proceeding with the share allotment.
Shares may be allotted for cash or for a consideration otherwise than in cash. Some reasons include:
- Due to a contract, which can be written or not.
- Due to a provision in the company’s constitution.
- In exchange for payment of dividends to a shareholder.
If your company is issuing shares other than in cash, you must attach a copy of the relevant documents (e.g. the contract or Order of Court) when submitting the “Return of Allotment of Shares” transaction via BizFile+.
Before filing the Return of Allotment of Shares for your company, you will need to prepare the following information:
- Number of shares allotted.
- Amount paid (if any) or deemed to be paid on the allotment of each share.
- Amount (if any) unpaid on each share.
- Class of shares that are being issued.
- Updated list of shareholders and their shareholdings. This list should include:
a. Personal particulars of each shareholder, such as full name, identification number, nationality and address
b. Number and class of shares held by each of the members.
Public companies that are not listed on the Singapore Exchange only need to list out the 50 members with the most number of shares in the company, excluding treasury shares. Listed public companies need not provide this information.
Transactions relating to shares are very important. If you are in doubt about share matters or how to file the correct share transactions in BizFile+, you should seek professional advice from a corporate service provider. If an error is made during filing and it cannot be resolved by filing a “Notice of Error”, you may be required to obtain an Order of Court to amend the error.