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It is important to know the roles and rights of a shareholder in Singapore

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Companies in Singapore treat their shareholders with utmost fairness and equity, allowing them to exercise their rights and enabling them to communicate their views on relevant matters that involve their respective companies. They provide shareholders a balanced, comprehensible, and complete assessment of the company’s position, performance, and prospects.

To be incorporated in Singapore, companies are required to have a minimum of $1 paid-up capital, one share, one shareholder, one local resident director, and a local registered address. The shares of a company in Singapore does not only designate company ownership, it also authorizes and appropriates the holder with rights, privileges, and responsibilities.


Regulations on shareholder rights and engagement in Singapore are governed both by statutory and non-statutory instruments as well as under common law. The Companies Act (CA) and the Securities and Futures Act (SFA) both comprise the core statutory framework and aptly supplemented by the Singapore Code of Corporate Governance 2012 (the Governance Code), the Listing Manual of the Singapore Exchange (the Listing Manual), and other non-statutory instruments.

Shareholder roles and responsibilities

  • Shareholders in Singapore are required to pay the full amount for their shares to their companies.
  • While Singapore company laws do not require their attendance, one of the key roles and responsibilities of shareholders is to attend and participate in Annual General Meetings (AGM) and Extraordinary General Meetings (EGM) of the company. It is during these executive general meetings that companies decide on resolutions that almost always require the shareholder votes. This is also the right forum for them to directly voice their opinions regarding relevant issues involving the management of the company to the directors.
  • Having a direct line of communication with the company’s board of directors, shareholders in Singapore companies are tasked to voice their opinions and interests regarding company matters to the company secretary since they are not able to participate in the day-to-day management of the company.

Shareholder rights

  • Right to vote: A shareholder is entitled to one vote for their shares in the company, and they can exercise this right to vote when ordinary resolutions have to be made typical ordinary share, such as when a new company director has to be elected to replace a retiring director or when new auditors need to be appointed or when there are changes in the company’s share capital, and the likes.
  • Rights to dividends: While company directors have the right to recommend the payment of a dividend of a fixed amount, the company has to pass an ordinary resolution through a shareholder vote to officially distribute a dividend. And because companies pay dividends in a hierarchy, they get to choose the order by which shareholders receive dividend payments.
  • Right to be treated fairly: Shareholders can seek remedy from the Singaporean government in the event that the director’s actions are oppressive or in disregard of the interests of any of the shareholders or the act of the company, directors, or other shareholders is prejudicial or unfairly discriminates one or more shareholders.
  • Right to call and attend meetings: The Singapore company law stipulates that two or more shareholders who own at least 10% of the company’s share capital can call an EGM, while shareholders have the right to attend AGMs where they are allowed to speak directly to the board of directors and their fellow shareholders.
  • Right to close the company: In the event that the company is deemed to be running a pyramid scheme or multi-level marketing, being used for unlawful purposes, or its director(s) have acted in their own self-interest to the detriment of the company, shareholders can seek to have the company closed.
  • Right to assets when the company is closing up: In the event that the company closes or shuts down, shareholders have the right to its assets. Preference shareholders and debt holders will normally get priority on claiming any of the company’s remaining assets over ordinary shareholders.

Lastly, it’s worthy to note that unless restricted by the company constitution, shareholders can freely transfer shares. Also, unless otherwise stated in the company constitution, the board of directors cannot restrict the transfer of shares, while the transfer of shares should be filed with the Accounting and Corporate Regulatory Authority (ACRA).

 

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