It is important for business owners all over the world to know just when it is in their own, as well as their business’s, best interests to no longer be the owner of their company. Some business owners who find themselves in such a predicament might choose to dissolve the company, thus ending the company’s existence forever. However, others who would prefer that the company remains active even after they relinquish control over it might transfer the ownership of the company to another person or legal entity. Such procedures are relatively common in Singapore: many owners of Singapore companies have transferred their ownership of such companies to other people or legal entities for any of various reasons.
Transferring Ownership of a Private Limited Company
Ownership transfers of private limited companies in Singapore take place in the form of share transfers. This is because the shareholders own a private limited company through the ownership of its shares. Before the ownership of a private limited company in Singapore may be transferred, a document (Instrument of Transfer) must be signed for the purposes of acquisition. Stamp duty will be imposed on the document to be signed; this stamp duty is to be paid to the Inland Revenue Authority of Singapore (IRAS) when the company’s shareholders transfer their shares. This stamp duty is either charged against the actual price of the shares or the shares’ value, whichever happens to be higher.
Every transfer of share ownership in Singapore will involve the input of both a transferor and a transferee. The transferor is the existing shareholder who is relinquishing shares. The transferee is the person or entity to be the intended recipient of the shares which the transferor is transferring.
The net asset value or the allotment price of the shares which are transferred will be taken as the value of all shares which are to be transferred. In some private limited companies, different classes of shares exist. When such is the case, the exact net asset value is dependent on the rights related to each respective class of share. Before you can transfer the shares of any company in Singapore, you will first have to own a Singapore-based company.