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Registered Capital Requirements in Singapore: A Comprehensive Guide
26/04/2023
If you’re planning to start a business in Singapore, one of the key requirements you’ll need to fulfill is to have a registered capital. The registered capital is the amount of money a company is legally required to be incorporated and carry out its business activities. But how much-registered capital is required in Singapore, and what are the implications of not meeting this requirement?
In this blog post, we’ll take a closer look at the registered capital requirements in Singapore and explain what you need to know to ensure that you comply with the law.
What is registered capital in Singapore?
Registered capital, also known as paid-up or share capital, refers to the amount of capital a company has raised by issuing shares to its shareholders. In Singapore, registered capital is a legal requirement for all types of companies, and it measures the company’s financial capacity and stability. The amount of registered capital required for a company in Singapore varies depending on the type of company and its intended business activities. Understanding registered capital and its requirements is crucial for anyone planning to start a business or invest in a company in Singapore.
What is the difference between issued capital and paid-up capital in Singapore companies?
While both terms are related to a company’s capital structure, they have different meanings and implications.
Paid-up capital refers to the amount of money that shareholders have paid for shares that the company has issued. In contrast, issued capital refers to the total amount of shares that have been issued by the company, whether or not they have been fully paid up yet.
Understanding this distinction is essential for complying with Singapore’s company registration requirements and for managing a company’s financial affairs.
What is the minimum paid-up capital requirement for a company in Singapore?
Registering a company in Singapore requires a minimum paid-up capital of just S$1.
However, if you plan to apply for certain immigration passes, you must meet a specific paid-up capital amount. For example, an EntrePass requires proof of a paid-up capital of at least S$500,000.
- Moreover, industry-specific companies may be subject to paid-up capital requirements as well. For instance:
- Travel agencies must maintain S$100,000 or S$50,000 (if they only operate tours within Singapore and do not arrange accommodation),
- Public accounting firms must have at least S$50,000 in paid-up capital and,
- Insurance intermediary firms require a minimum of S$300,000.
While S$1 is the minimum required amount, having a higher paid-up capital can lend credibility to your business and instill confidence in potential investors and creditors.
Where should a company pay the registered capital?
In Singapore, the paid-up capital is typically paid into the company’s bank account, which can be opened after incorporation. The funds can be transferred from the shareholders’ personal bank accounts to the company’s bank account.
It’s important to note that the paid-up capital must be in cash or assets easily converted into cash, such as bank drafts or cashier’s orders.
After paying the capital, keeping it in the bank account is not mandatory. You can utilize the capital to pay for general business expenses or salaries of the employees. However, if you use the capital for personal expenses, it will be considered a loan, and you must repay it to the company.
Can you increase the company capital for a company in Singapore?
One way to increase your company’s capital is to issue new shares. These shares can be offered to existing shareholders or sold to new investors interested in investing in your company. However, it is important to note that several legal requirements must be followed when increasing a company’s capital.
If you want to increase your company’s capital, you must follow several legal requirements. One is calling an extraordinary general meeting to seek company shareholders’ approval. During this meeting, you will need to present the proposal for the increase and seek their consent.
Once the capital has been paid into the corporate bank account, updating your business profile on ACRA’s BizFile+ portal is important. This ensures that your company’s information is accurate and up-to-date. Following these legal requirements is crucial to ensuring that your company’s increase in capital is done properly.
To increase the companies capital, the following documents are required:
- Proof of capital injection (payment slip from the corporate bank account)
- Ordinary resolution authority
- Directors’ resolution
- Letter to the company secretary
- Application of shares
What happens if you do not fully pay for your shares in Singapore?
When it comes to registering a company in Singapore, shareholders are required to pay for their shares. Failure to do so can lead to consequences for both the shareholder and the company.
If a shareholder has not fully paid for their shares, the amount owed remains a liability for the shareholder towards the company. Additionally, the company’s constitution may include provisions barring shareholders from voting until they fully pay for their shares.
Furthermore, any unpaid portion of the shares will result in the shareholder being personally liable for their portion of the unpaid capital. In contrast, if the shares are fully paid up, the shareholders are not personally liable to the company’s creditors. Shareholders must ensure that they fully pay for their shares to avoid any legal and financial repercussions.
What happens to the paid-up capital when a company is liquidated?
A liquidator is appointed to handle the process when a company is winding up. The liquidator’s duty is to sell off all the company’s assets, including the paid-up capital, and use the proceeds to pay off the company’s creditors. If any funds are left over after paying off the creditors, the liquidator will distribute them among the shareholders according to their shareholding ratio. If there is any further surplus, the liquidator will distribute it among the shareholders in proportion to their paid-up capital contribution.
How can Belaws help?
If you have a question about registered capital for companies in Singapore, please speak directly with one of our experts.
You can also view our Singapore incorporation services here.
This article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of 1 hour and are conducted by our expert lawyers who are fluent in English, French and Thai.
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Frequently Asked Questions
How do I register my GST number in Singapore?
You can register your GST number in Singapore by submitting an application online through the Inland Revenue Authority of Singapore (IRAS) website using your SingPass or CorpPass account. Alternatively, you can also submit a hard copy of the application form to the IRAS.
Who needs to register for GST in Singapore?
Businesses that make taxable supplies of goods and services and have an annual turnover of more than S$1 million are required to register for GST in Singapore. However, businesses that have an annual turnover of less than S$1 million may choose to register for GST voluntarily.
When should I register for GST in Singapore?
You should register for GST in Singapore within 30 days of your business exceeding the annual turnover threshold of S$1 million, or if you anticipate that your business will exceed the threshold within the next 12 months.
What does it mean to be GST registered in Singapore?
Being GST registered in Singapore means that your business is registered with the Inland Revenue Authority of Singapore (IRAS) and is authorized to charge GST on taxable goods and services provided to customers. GST-registered businesses can also claim input tax credits on GST paid on business purchases and expenses.
Is GST number the same as business number in Singapore?
No, GST number and business number are not the same in Singapore. A GST number is a unique identification number assigned by the Inland Revenue Authority of Singapore (IRAS) to businesses that are registered for GST. On the other hand, a business number in Singapore generally refers to the Unique Entity Number (UEN) which is a standard identification number used by government agencies to identify businesses.
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