Forming a company in the Lion City is quite simple and straightforward, so long as you follow all the rules and regulations as stipulated by law. Whether you do it yourself or hire a company incorporation services in Singapore, you need to know all the requirements that must be accomplished when incorporating a company. One of which is the paid-up capital.
Here are some of the frequently asked questions (FAQs) about paid-up capital and its significance when undergoing a new company registration in Singapore.
What is Paid-up Capital?
Paid-up capital is the total amount of capital that the owners or shareholders have put into funding the company. This is the sum of money that shareholders have given in exchange for the shares they have purchased from the company. These funds are then used to finance the operation of the business.
What is the minimum amount of paid-up capital that is required to form a company in Singapore?
The minimum amount of paid-up capital that is required for new business registrations in Singapore is S$1.
Is there a required currency for paid-up capital?
Singapore law allows any legal currency to be used as paid-up capital.
When should the paid-up capital be paid?
The paid-up capital is required to be settled immediately upon company incorporation. The funds should be deposited into a corporate bank account.
Can a shareholder withdraw his share of the paid-up capital?
A shareholder is not allowed to withdraw his share or any amount from the paid-up capital. Once this has been given for a new business registration in Singapore, the paid-up capital belongs to the company and must be used for its business needs.
Is there a lock-up period for the paid-up capital?
No, there is no lock-up period. Once money has been injected into the company as paid-up capital, it can be utilised anytime but solely for business purposes.
Can paid-up capital be increased?
When paid-up capital is increased, this is in the form of new shares. Paid-up capital may be increased through accepting new shareholders to buy shares from the company or through existing shareholders who may increase their original shares.
Is there a process that should be followed when increasing paid-up capital?
The paid-up capital may be increased at a later date following this procedure:
- The required capital must first be deposited into a corporate bank account. A copy of the bank statement showing proof of capital injection must be sent to the company incorporation services in Singapore that you hired to help you with company formation.
- Once the bank statement has been received, the company formation firm may ask you to produce the following documents:
- Ordinary Resolution showing authority to issue shares
- Resolution from directors detailing allotment of shares
- Extraordinary General Meeting
- Letter to be issued to the company secretary
- Application of shares
These documents will then be filed with corporate authorities (Company Registrar) to update the paid-up capital of the company.
What are the requirements for paid-up capital when incorporating a company in Singapore?
Paid-up capital requirements for new company registrations include the following:
- A minimum paid-up capital of S$50,000 for those applying for a relocation visa (Entrepreneur Pass or EntrePass)
- There is no required paid-up capital for those applying for a relocation visa in the form of an Employment Pass or EP
- For those setting up a regulated business, which includes companies such as a travel agency or a recruitment agency, the paid-up capital will depend on the licencing requirements
Keeping this information in mind can help new entrepreneurs efficiently handle their paid-up capital requirements when undergoing business registration in Singapore. To make the process easier, however, business owners can hire a company incorporation services in Singapore to help them with handling such requirements with efficiency.
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