Legal Business. Memorandum On Incorporation Of A Private Company With Limited Liability In Singapore

Transcription

1 Memoranda on legal and business issues and concerns for multiple industry and business communities Memorandum On Incorporation Of A Private Company With Limited Liability In Singapore 1 Rajah & Tann 4 Battery Road #26-01 Bank of China Building Singapore Tel: Fax: eoasis@sg.rajahandtann.com Website:

2 Memorandum On Incorporation Of A Private Company With Limited Liability In Singapore Incorporation Procedure Application To The Registrar Of Companies Where it is intended to incorporate a private company with limited liability, the first step is to apply to the Registrar of Companies (the Registrar ) to reserve the proposed name for the company. This is usually a fairly straightforward process and the Registrar normally takes approximately seven (7) days to process such an application. Inclusion Of Descriptive Word In The Proposed Name Of The Company In most cases, the proposed name of the company should include a short descriptive word indicative of the company s main business. This requirement, may, however, be dispensed with in the case of large, well-known multinationals establishing a local subsidiary under a name used worldwide. Every limited company must have the word Limited (or its abbreviated form Ltd ) at the end of its name, and a private limited company must have the word Private (or its abbreviation Pte ) before the word Limited. Name Of Company Is Subject To Registrar s Approval The name of a company is subject to approval by the Registrar. The Registrar has discretion to refuse a name which is found to be undesirable, or confusingly similar to the name of an existing corporation or business. Where the proposed name incorporates the name of an existing corporation or business, the consent of the existing corporation or business must be obtained and filed with the application for name approval. For this reason, a search of the Register of Companies and Businesses is usually conducted to ascertain whether any other corporation or business has prior use of the proposed name. Reservation Of Name For 2 Months Once approved, the name is automatically reserved for a period of two (2) months from the date of filing Form 14. Incorporation Documents Documents Required To Be Filed With The Registrar If the proposed name is available for reservation and the application is approved, the following incorporation documents must be filed with the Registrar: (a) (b) Memorandum and Articles of Association; Form 6 - Statutory Declaration of Compliance to be signed by the solicitor handling the incorporation on your behalf Page 1

3 (c) (d) (e) (f) (g) (h) Form 7 - Certificate of Identity in respect of subscribers to the Memorandum of Association, to be signed by an advocate and solicitor or a notary public; Form 24 - Return of Allotment of Shares to be signed by a director or the company secretary of the proposed company; Form 44 - Notice of Situation of Registered Office and of Office Hours at Time of Registration to be signed by a director or the company secretary of the proposed company; Form 45 - Consent to Act as Director and Statement of Non-Disqualification to Act as Director. This is to be signed by the first directors before an advocate and solicitor or a notary public; Form 49 - Return giving Particulars in Register of Directors, Managers, Secretaries and Auditors at the Time of Incorporation at the time of incorporation is to be signed by a director or company secretary of the proposed company; and Particulars of the first Directors and Subscribers as required by the Registry. Time Taken To Process Incorporation Documents The Registrar usually takes up to ten (10) days from the date of the filing of the incorporation documents to process these documents. If these are in order, the Registrar will then issue the Certificate of Incorporation. Registrar s Discretion Whether Or Not To Incorporate A Company The Registrar has the discretion not to incorporate a company if it is not in the best of interests to do so. Also, if the approval of any authority is required for the incorporation, the Registrar will not incorporate the company unless the approval of such authority has been obtained. General Principles On Incorporating A Limited Liability Company In Singapore Shareholders And Share Capital Minimum Registration Fee The Act does not prescribe any minimum capital requirement, but there is a minimum registration fee of S$1, payable. On payment of this fee, the Company can have an authorised share capital of up to S$100, Where it is intended that the authorised share capital be in excess of S$100,000.00, the registration fee payable will be higher and is computed based on the rates set out in the Second Schedule to the Act. Issued And Paid Up Capital As regards the issued and paid up capital, the Act does not prescribe any minimum except to require at least two subscribers to subscribe for at least one share each in the company for purposes of the incorporation of the company. The company could be formed with an issued capital of S$2.00, which could upon the formation of the company be increased to the required amount. The par value for shares is usually fixed at S$1.00 per share. No-par value and bearer shares are not permitted. Page 2

4 Minimum Number Of Shareholders The proposed company must have at least two shareholders, unless the shareholder is a corporation, in which case the parent corporation can be the sole shareholder. Appointment Directors Requirements For Directors The Act requires a company incorporated in Singapore to have a minimum of two Directors who must be natural persons of full age and capacity. Of the two, at least one Director has to be ordinarily resident in Singapore. A person who is neither a Singapore Citizen nor a Permanent Resident of Singapore may fulfill this requirement if he is granted an employment pass by the Controller of Immigration and is physically resident in Singapore. Completion Of Form 45 To Effect Appointment Prior to the appointment being effective, the persons to be named as director must complete the prescribed Form 45. In circumstances where this document is executed outside of Singapore, it must be signed, after the details required therein have been filled in, before a notary public, and the notary public must certify and affix his seal in the manner indicated on the form. If the form is executed in Singapore, it is only necessary to have the form signed before an advocate and solicitor. In addition, the director must complete a form entitled Particulars of the Director indicating thereon information which is required by the Company under the Act. Appointment Of Secretaries Requirements For Secretaries Every company is obliged to appoint a company secretary, who must be a natural person and who has his or her principal or only place of residence in Singapore. The proposed company secretary to be appointed must satisfy the requirements prescribed by the Act. In general, the Act requires a company secretary to be either an approved company secretary, a lawyer or an accountant. Location Of Registered Office A company incorporated in Singapore must have a registered office as from the date of incorporation. This registered office must be open and accessible to the public for not less than 3 hours during ordinary business hours on each day, except Saturdays, weekends and public holidays. The Act requires that the company secretary must be present in person or by his agent at the registered office on the days and the hours during which the registered office is to be accessible to the public. Appointment Of Auditor The Act requires the accounts of every company to be audited once every year. Accordingly, every incorporated company is also obliged to appoint an auditor within 3 months of the incorporation of the company. It is usual, however, to arrange for the appointment of an auditor upon the incorporation of Page 3

5 the company. The auditor has to be an approved company auditor, ie, one who is approved by the Minister for Finance. Preliminary Issues To Be Resolved Upon Incorporation First Directors Meeting There are a number of matters which must be dealt with by the directors as soon as possible after incorporation. These matters are normally dealt with at the first meeting of directors, or by a resolution of the directors in writing, if permitted by the articles of the company. Appointment Of Bankers The standard banking resolutions are normally adopted at the first meeting of directors. Details of the bankers you wish to use for the company (both the name of the bank and the branch) should be provided so that adoption of the necessary resolutions can be arranged. Details as to signing authority on the account(s) should also be provided. Setting Of The Fiscal Year End The fiscal year end is normally determined at the first directors meeting. Under the provisions of the Act, a company is required to hold its first Annual General Meeting ( AGM ) within eighteen months from the date of incorporation. The directors are required to lay before the shareholders at this AGM the audited accounts for the immediately preceding financial year, and those accounts must be made up to a day not more than six months before the date of the AGM. You might wish to bear these deadlines in mind in setting the financial year end of the company. Sealing Provisions Specific Resolutions Authorising The Use Of The Corporate Seal Unlike many overseas jurisdictions, it is normal practice in Singapore for the articles of the company to contain a very restrictive provision with respect to the use of the corporate seal. In general, under these articles, it is necessary for the director to pass a specific resolution authorising the appropriate directors/officers of the company to seal the relevant document each time a document is to be sealed. General Resolutions Can Be Adopted If Specific Provision Are Too Restrictive If this provision is found to be too restrictive, it is possible to have the directors adopt a general resolution allowing any two directors, or any one director and the secretary, to affix the seal to documents which must be sealed. A further resolution at the board meeting held in conjunction with each AGM would then ratify the directors actions in sealing documents throughout the year. If you would prefer the greater flexibility involved by such a general resolution, please signify that fact. Page 4

6 Share Transfers And Additional Allotments Share Transfers The shares taken by the first subscribers, usually one each, are normally transferred to the ultimate shareholder at the first meeting of the board of directors. Instructions should be given as to the shareholder(s) who will assume the two shares issued upon incorporation. It will be necessary to complete a share transfer form for each share, a copy of which is attached hereto, to effect that transfer. The transfer form must be signed by both the transferor and the transferee. In circumstances where the transferee is a company, the transfer form must be signed in the manner normally contemplated under the articles of association of that transferee, and the corporate seal must be affixed. In all cases, the execution by the transferee must be duly witnessed, and the witness should sign and supply the details noted on the form. Issue Of Additional Shares In addition, if it is contemplated that additional shares will be issued, these matters can be dealt with at the first meeting of directors. When you plan to issue more shares you should provide details as to the number of shares to be allotted, and the particulars of the shareholder in question. The shares must be allotted but may not be issued until such time as there has been confirmation that the funds have been forwarded to the company in payment for the shares. Key General Requirements That An Incorporated Company Must Comply With A Singapore company ( Singapore Company ) is required to make certain periodic and on-going filings under the Act, the most important of which can be summarised as follows: Annual Returns Filing Of Returns In Prescribed Form Which With One Month Of Holding The AGM In general, a Singapore Company must file an Annual Return in prescribed form within one month of holding its AGM. The form requires disclosure of miscellaneous corporate details such as registered office, list of registered charges, list of shareholders, directors, auditors, etc. The first AGM must be held within eighteen months of incorporation, and thereafter once each calendar year, provided not more than fifteen months from the date of the last AGM. Accounts For The Relevant Accounting Period Are To Be Presented At Each AGM At each AGM, the directors are required to lay before the members an audited profit and loss account and balance sheet, made up to a date not more than six months before the date of the meeting, which gives a true and fair view of the accounts of the company for the relevant accounting period. A copy of the audited reports must be filed at the Registry of Companies and Businesses ( RCB ) with the Annual Return. Page 5

7 Changes In Corporate Organisation Notification Of The Registrar Singapore Companies are required to notify the Registrar within specified time periods of the happening of certain specified events. The events are notified to the Registrar in prescribed form and must be supported by documents evidencing the change. These are as follows: (a) Change of Name Before a Singapore Company changes its name, an Application for Approval for the proposed new name must be submitted to the RCB (in Form 14A) together with the filing fee of S$ Having obtained the RCB's approval to the proposed new name (usually within a week of filing the application), the Singapore Company may proceed to change its name (by a special resolution of the members), and thereafter, to file a Notice of the special resolution in Form 11. Within a week, the RCB will issue a Certificate of Incorporation on Change of Name (Form 13), upon which issue the change of name becomes effective. (b) Change of Objects Notice of the special resolution of the members to change the Singapore Company's objects in its memorandum must be filed with the RCB (in Form 11) not earlier than 21 days and not later than 35 days after the passing of the resolution (except where any member or class of members has applied to the High Court to cancel the change in objects). The change of objects becomes effective upon such filing. (c) Alteration of Articles of Association A notice of the resolution (a special resolution unless otherwise provided in the company's articles of association) to alter the articles must be filed with the RCB (in Form 11) within one month of the passing of the resolution. The alteration becomes effective on and from the date of the resolution or on any later date specified in the resolution. (d) Allotment of Shares Within one month after a company's shares are allotted by its directors, it must lodge a Return on Allotment of Shares (Form 24) stating: (i) the number and nominal amounts of the shares comprised in the allotment; (ii) the amount if any paid, deemed to be paid, or due and payable on the allotment of each share; (iii) where the capital is divided into shares of different classes, the class of shares to which each share in the allotment belongs; and (iv) the full name and address of each of the allottees and the number and class of shares allotted to him (and his identification or passport number and nationality, if so required by the RCB). Page 6

8 Where the allotment is made for consideration other than cash, the particulars of such consideration must also be lodged (in Form 25) and if the allotment is made pursuant to a written contract, a certified copy of the contract must be lodged. In addition to Form 24 (and, if appropriate, Form 25), the Singapore Company must also file a copy of the shareholders' resolution authorising the directors of the Singapore Company to issue and allot the shares. This is done in Form 11 or Form 52 (if the Singapore Company is wholly owned by another corporation, and the resolution is signed by the holding company's representative.) (e) Increase in Authorised Capital Notice of a resolution to increase the authorised capital of the Singapore Company (in Form 28, and Forms 11 or 52) must be lodged with the RCB within one month of the passing of the resolution, together with registration fees calculated by reference to the table of registration fees in the Second Schedule to the Act less the amount of fees already paid on the previous authorised capital. Registration Of Charges Types Of Charges Which Must Be Registered In the event that the Singapore Company creates certain types of charges over any of its property or assets situated in Singapore, particulars of the charge together with a verified copy of the instrument creating the charge must be delivered to the Registrar within thirty days after the creation of the charge. The types of charge to which this requirement applies are set forth below: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) a charge to secure any issue of debentures; a charge on uncalled share capital of a company; a charge on shares of a subsidiary company, which shares are owned by the Singapore Company; a charge or an assignment created or evidenced by an instrument which if executed by an individual would require registration as a bill of sale; a charge on land wherever situate or on any interest therein; a charge on the Singapore Company's book debts; a floating charge on the undertaking or property of the Singapore Company; a charge on calls made but not paid; a charge on a ship or aircraft or any share in a ship or aircraft; and a charge on goodwill, on a patent or licence under a patent, on a trademark, or on a copyright or a licence under a copyright. Page 7

9 Consequences Of Non-Compliance With The Registration Requirement If any relevant charge to which this requirement applies is not registered in Singapore, then that charge shall, so far as any security on the Singapore Company's property or undertaking was conferred, be void against the Singapore Company's liquidator or creditors. Satisfaction Of Charge When the debt for which the charge was given has been satisfied in whole or in part or the property or undertaking charged or any part of it has been released from the charge or has ceased to form part of the company's undertaking or property, the Singapore Company may lodge a Memorandum of Satisfaction of Charge (Form 41) supported by a statutory declaration as to the satisfaction of the charge (Form 43). Registered Office Notice of any change in the situation of a company's registered office, or of the days and hours during which it is open to the public must be lodged (in Form 44A) within one month from the change (Notice of the original situation of the registered office would have been filed together with the incorporation documents). Particulars Of Directors, Managers, Secretaries And Auditors Resignations, removals, appointments and any changes in the name, residential address, or occupation of any of the company's directors, managers, secretary or auditors must be notified to the RCB within one month in Form 49. In the case of a new appointment of a director, a Form of Consent together with a prescribed statement that he is not disqualified to act as a director (Form 45) must be signed by the proposed director in the presence of an advocate and solicitor or an approved auditor (if signed in Singapore) or a notary public (if signed outside Singapore) before his appointment and must be filed before Form 49 is lodged. Use Of Name Appearance Of Full Name Of Singapore Company The full name of the Singapore Company must appear on all billheads, letterheads, prospectuses and other official documents which it issues, and also on a signboard outside its registered office and at every other place of business which it establishes in Singapore. Businesses Names In addition, if business is to be carried on under any other name, that name should be registered as a business name of the Singapore Company. Registers The secretary of the Singapore Company must maintain a number of registers including a register of members, a register of directors, managers, secretaries and auditors, a register of debentures and charges, etc. You should also note that a Singapore Company may maintain a branch register of Page 8

10 members outside Singapore, although a notice must be given to the Registrar that such a branch register is maintained. Certain share transfers can be made on that branch register, although copies of the entries in the branch register must be sent to the Singapore register. Rajah & Tann is one of the largest law firms in Singapore. It is a full service firm and given its alliances, including US premier firm Weil, Gotshal & Manges, is able to tap into a number of countries. Rajah & Tann is firmly committed to the provision of high quality legal services. It places strong emphasis on promptness, accessibility and reliability in dealings with clients. At the same time, the firm strives towards a practical yet creative approach in dealing with business and commercial problems. The information contained in this newsletter is correct to the best of our knowledge and belief at the time of writing. Specific professional advice should be sought before any action is taken. In this regard, you may call the lawyer you normally deal with in Rajah & Tann or the Knowledge Management team at eoasis@sg.rajahandtann.com Rajah & Tann Knowledge Management. All rights reserved. Page 9