Transfer of Shares
Updated: Feb 3
Shares and Updating Share information
A share is a portion of the company which belongs to a shareholder in exchange for his financial contribution towards the company’s share capital. A share may be fully or partially paid up.
By paying for the shares, an investor is buying partial ownership of a company and becomes a shareholder. A shareholder may be an individual, a company or a limited liability partnership.
Transfer of Shares
Shareholders can transfer shares to other shareholders. Existing shareholders can transact with an existing shareholder or with a new shareholder, subject to the provisions of the company’s constitution. Any transfer of shares will need to be in compliance with the constitution. Only fully paid shares can be transferred.
In such transactions, the company does not get paid and the transfer of shares is not initiated by the company. Nonetheless, the company must notify ACRA if there is a transfer of shares in the company by filing the “Transfer of Shares/Update List of Members” transaction.
The transfer does not take effect until ACRA updates the company’s Electronic Register of Members (EROM) to reflect the shares transaction. As shareholders are usually also members of the company, the EROM must be updated whenever there are changes in the shareholdings.
Here is information required for the process of Transfer of Shares for private/public company.
1. Unique Entity Number (UEN) 2. Date of change/transfer 3. New Shareholder's particulars 4. Shares held by each shareholder 5. Date of becoming member/date of cessation 7. Currency How long it will take
The share information will take about 5 to 20 minutes to be updated. A private company is first required to notify the Registrar of the information to be entered in the EROM using the "Update of paid up share capital" form, before the Registrar will enter into the EROM any information notified by the company to the Registrar using this form.
Filing Transfer of Shares/Update List of Members transaction is free of charge.
Stamp Duty for Transfer of Shares
Stamp duty is charged on the document signed when you buy or acquire shares by way of purchase e.g. share transfer instruments. The duty is payable on the actual price or value of the shares, whichever is higher.
Determining Value of Shares
1. Shares Listed on the Stock Exchange of Singapore
The value of the shares transferred is taken to be the average price on the Stock Exchange of Singapore as at the date of the document.
When there is no available average price as at the date of the document, the latest average price of the shares can be used.
2. Shares in Private Companies
The value of the shares transferred is taken to be the net asset value (NAV) or the allotment price of the shares in the target company.
Where there are different classes of shares (e.g.: preference shares in the target company), the NAV will depend on the rights attached to the respective class of share.
a. Where the company has been incorporated for more than 18 months
For Stamp Duty purposes, the value of the shares transferred is the NAV of the target company. The NAV is computed based on the latest statement of accounts of the target company which should be dated within 24 months before the date of transfer.
Where the target company owns any property, the market value of the property as at the date of document should be used in place of the book value if the book value is not reflective of the market value.
b. Where the company has been incorporated for 18 months or less
For Stamp Duty purposes, the value of the shares transferred is the allotment price if the target company does not own any property.
Where the target company owns any property, the management accounts have to be prepared to determine the NAV of the shares.
The statement of accounts or management accounts should:
a. Reflect the market value of the property as at the date of document for the share transfer
b. Be certified by the director or secretary of the company
Stamp Duty Rates for Transfer of Shares
0.2% of the purchase price or the value of the shares
Stamp duty is rounded down to the nearest dollar, subject to a minimum duty of $1.