Transfer of Shares in Singapore Private Limited Company

Content Team6 minute read24 Aug 2021

Transfer of Shares in Singapore Private Limited Company

A private limited (Pte Ltd) company is the most recommended and also the most widespread type of entity in Singapore among other kinds of businesses. It can only be owned by maximum 50 shareholders. Certainly, there are many circumstances under which a shareholder may consider to transfer their shares to other people.

Compared to selling shares in a listed company, transferring shares in a private company seems to be more difficult since this type of company is privately held and shall not issue shares to the public. A transfer of shares may be restricted by the company’s constitution in Singapore.

Therefore, it is better to learn the general procedure of share transfer in a private limited company to avoid the transfer being considered invalid later. Keep reading as we will break down the process in detail for you to understand.

1. Required Documents

Below are some transfer-of-share forms in Singapore that are always included in the process:

  • Instrument of Transfer
  • Notice of Transfer
  • Written Board Resolution
  • Share Certificate
  • Stamp duty acknowledgment

(The details of these forms will be discussed later when we will mention them again in the rest of this blog)

Some other papers may be also added such as Waiver of Pre-emptive rights or Notice of refusal.

2. Procedure for Transfer of Shares in Singapore

Quick definitions before starting: “transferor” means the original shareholder who wants to transfer their shares and “transferee” refers to the share recipient or buyer. In this blog, we will assume that you are the transferor.

Back to the procedure, it will be divided into 3 stages:

2.1. Pre-Application

Before transferring shares, the transferor needs to bear in mind some of the following things:


The first step is to make a contract for the share transfer. If you do not have any experience with this, it is highly recommended to get a lawyer to establish the foundation of the transfer.

The price is one of the basic factors that should not be overlooked. Indeed, it is not easy to calculate the actual value of shares due to the fact that the future profits of a company are sometimes hard to predict. Commonly, the sale price of shares should be clearly fixed in advance and stated in the contract.


The next thing to be taken into account is the restrictions of the company. Usually, in order for the transfer to happen, there has to be approval from the board of the company. It is advisable for you to discuss ahead with the board to see whether there is any restriction that you need to follow or whether there is any other agreement on the transfer of shares between the shareholders.

Pre-emptive Rights

One of the most important points to check before any share transfer is Pre-emptive Rights. Such rights give existing shareholders in the company the first priority to obtain the shares being transferred.

If the pre-emptive rights are specified in the company’s constitution, then you have to offer the shares, which you tend to transfer, to the other existing shareholders first before offering them to company outsiders.

How does it work out? You will have to send Notice of Transfer to inform other shareholders that the shares are being offered and see if they want to exercise their pre-emptive rights. If no one is interested in the offer, they will sign a Consent for Waiver of Pre-emption Rights.

After collecting these consent papers, you are good to move on to the next stage.

2.2. Application

At this main stage, the transferor will start to apply for approval and pay for the stamp duty.

Instrument of Transfer

An Instrument of Transfer is the agreement from both the transferor and transferee on the share transfer. This document must be signed by both parties in order for the transfer procedure to begin.

Since the shareholders of a Singapore private company can be either an individual or a corporate entity, the transferee can also be the former or the latter:

  • If it is an individual signing the Instrument of Transfer, then a witness has to be involved.
  • If it is a corporate entity signing the Instrument of Transfer, then the entity’s common seal is required. The entity can also assign a representative to do the signing.

Making Transfer Request

Subsequently, you need to apply for approval from the board of the company by sending a written request to them, according to Section 128 of the Companies Act. The board has 30 days to finalize the decision whether to approve or not. Overall, regardless of the result, everything needs to be noted down carefully in a written board resolution record.

The board, then, reviews the transfer and considers if any conflict of interest could happen. It might appear to be the case that the new proposed shareholder (the transferee) disagrees with the company’s aim and policies, which may result in a conflict among the company’s shareholders. Under very few reasonable circumstances, the board can turn down the transfer. If that is the case, a Notice of refusal will be sent to both the transferor and transferee.

Stamp Duty Payment

Stamp duty is basically a tax that is levied on property purchases or documents such as stock or share. In 14 days from the execution of the Instrument of Transfer, stamp duty must be paid to IRAS. If the Instrument of Transfer is executed outside Singapore, the stamp duty needs to be paid within 30 days after it has been received in Singapore.

The Instrument of Transfer normally states whether the transferor or the transferee will pay the stamp duty for transfer of shares in Singapore, provided that it is an agreement between both parties. If it is not mentioned clearly in the document, the transferee will hold the responsibility for the payment, according to the Third Schedule of the Stamp Duties Act.

The payment can be made directly at IRAS or online. Afterward, you will receive a form of acknowledgment proving that you have paid the stamp duty. Late payment may result in a penalty. For more information, check here.

In respect of the fee, stamp duty is usually at 0.2% of the share purchase price or the market value of the shares, whichever is higher. The market value of the transferred shares can be calculated as following:

[Market value per share = Net asset value of the company / Total number of issued shares]

[Total market value = Market value per share  x  The number of transferred shares]

Since there maybe be multiple classes of shares in existence, a working sheet for verification may also be required by IRAS.

2.3 Post Application

A few more steps need to be done before the transfer procedure ends.

Surrender of the Original Share Certificate

A Share Certificate is a written document that serves as legal proof of ownership of a number of shares. After the transfer is approved, you as the transferor, need to send your Share Certificate back to the company for cancellation. The deadline for you to do this is solely determined by the board. It usually lies between 7 and 28 days from the date that the share transfer request is made.

Update to ACRA

Upon the receipt of the Original Share Certificate, the board must inform the transfer of shares to ACRA in Singapore by submitting a Notice of transfer, according to Section 126 of the Companies Act. It is a must for all companies to maintain the latest updated information of the company members with ACRA. The transfer will only take effect once ACRA has updated the electronic register of company members. This task can be done by the company secretary.

New Share Certificate Being Issued

The procedure ends with the issuance of the new Share Certificate to the transferee. Pursuant to Section 130AE of the Companies Act, this has to be done in 30 days from the date that ACRA updates the register of company members and should be done by the company secretary.

3. Conclusion

All in all, the procedure of transferring or selling shares in a Singapore private company seems to be more complex than that in a listed company. Before asking for approval from the board, make sure that you have everything double-checked including pre-emptive rights. After the approval, please remember to pay the stamp duty to IRAS and update the information to ACRA.

You can engage a corporate service provider to assist you with the transfer of shares in Singapore. An experienced company secretary can keep you always on track in the hassle procedure. For more information, contact us now. We are always willing to help!

Share this article

Industry News & Insights