First of all, thank you for choosing Singapore as the country to start your business. Given Singapore’s robust economy and government initiatives, you are greeted with many options when it comes to your business’ shareholder structure. That makes it tricky to find the most suitable choice for your company. Check out these important steps that will help you to find the right structure!
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Back to Basics
Gathering the basic information about shares and their holders would set you on the right track. There are ordinary and preference shares, and they both offer different rights and responsibilities. Each company has total freedom in choosing the desired Singapore business shareholder structure, as long as it suits the your business’ profile.
Splitting the Pie with Your Shareholders
The first obstacle to conquer is how to divide the shares between the company founders. Naturally, the CEO should get a bigger percentage. That will give them a larger portion of shares but this would also require them to manage the company on a daily basis.
An alternative approach is to decide based on the capital invested. The person who invested the most would receive the most shares. It’s also possible to discuss with the major investors. For example, if they do not want to participate in daily management, preference shares are a smart choice. They secure the desired profit distribution priority but not the same voting rights.
Suggested Read: A Step by Step Guide for Company Registration in Singapore
Finding Your Paid-Up Capital
This capital is the initial investment for your company’s development. You can invest as little as $1, but realistically you will need much more to give your business credibility and a solid foundation. A good amount to start your investment would be at S$5,000.
Once you have the paid-up capital amount, you can decide on the price per share. Although you can change the price based on share types, you can also use the same price for all classes. For example, the cost per share can be $1.
In this example, you might issue 5,000 shares for $1 each. You can divide them among the stakeholders according to the money they want to invest. Remember to keep track and monitor the amount of allocated shares to each investor. This ensures transparency in the company and increases trust among the business’ shareholders.
Suggested Read: 8 Things to do after Incorporating your Singapore Company
Start Your Singapore Business with SCI
At Singapore Company Incorporation, we have helped thousands of companies to launch their businesses in Singapore. Our team offers anything from incorporation assistance to accounting and corporate compliance services. You can expect a team of experts to guide and ensure you do everything by the book. If that sounds good, don’t hesitate to contact SCI today!
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