Can a shareholder be less than 18 years old in Singapore?

3 minute read

According to Singapore law, every incorporated company must have at least one shareholder. A shareholder in a company is a company member who has a portion of ownership in the company.

A shareholder does not necessarily need to be a person. It can be a legal entity too.

The key requirement is that this entity or person has invested a certain amount of money (or share capital) and that is why they receive a percentage of company shares.

But can an underage individual be a shareholder in Singapore? What are some basic eligibility requirements that need to be met by shareholders in Singapore? Our article answers these questions below.

Overview:

Minimum age requirement for shareholders

To answer your question: no, we do not recommend a shareholder being less than 18 years old.

While the Companies Act of Singapore does not explicitly state the minimum age for a shareholder, minors are presumed to have no contractual capacity when signing legally-binding contracts. As such, they are not bound to any contract that they enter before the age of 18.

This could raise potential issues for your business in the future.

Instead, it is possible for a minor to be the beneficial owner of shares that are held by their legal guardian. These shares could then be transferred back to them once they reach 18 years of age.

If you choose to proceed with this, we recommend engaging in a law firm that can help you draft the necessary legal documentation such as a nominee shareholder on trust for the minor.

Other shareholder requirements for Singapore businesses

Here are some other requirements to take note:

  • A private limited company must have at least one shareholder and cannot exceed a maximum of 50 shareholders.
  • Shareholders can be persons, or local or foreign corporations.
  • Singapore allows for 100% company ownership by foreign shareholders (individuals or legal entities).
  • A shareholder must at least own shares of the company first.
  • Considering that the company is a separate legal entity, the shareholder does not hold any assets of the company nor are they liable for the debts of the company.

Shareholder rights

As owners of the company, shareholders are granted certain rights and these rights bring various responsibilities. These are the most important rights that a person obtains once they become a shareholder:

  • First, let’s start with voting rights. The usual ordinary share gives a shareholder one vote. Shareholders exercise their voting rights when an ordinary resolution is required.
  • The second most important right is the right to attend and call meetings. Shareholders have the right to attend Annual General Meetings (AGMs).
  • Shareholders also have the right to speak directly to other shareholders and the board of directors. In certain cases, minority shareholders can call meetings between AGMs.
  • According to the Singapore company law, two or more shareholders who own at least 10% of the share capital of the company can call an Extraordinary General Meeting (EGM).

It is also worth mentioning a few rights that are not so well known:

  • Right to be treated fairly. According to a section of the Companies Act, a shareholder can seek remedy from the government if certain rights breaches happen.
  • Rights to dividends. The company directors have the right to recommend the payment of a dividend of a fixed amount. But to officially distribute a dividend, the company has to pass an ordinary resolution through a shareholder vote.
  • Right to wind up the company. In various scenarios, shareholders can seek to wind up a company.
  • Right to assets when winding up. Shareholders have the rights to company assets if the company winds up.
  • Shareholders hold the power to adopt or change the company’s Articles of Association. They also enjoy veto power when there is an issue regarding the capital reduction.
  • Also, in public companies in Singapore, shareholders have the power to remove directors and approve auditors.

Clearly, there are numerous rights and powers that belong to the shareholders of Singapore companies. Some rights are as important as a right to vote on the winding-up while some only deal with the rights to remaining assets (office material and equipment).

If you are a shareholder or you are about to become one, it is recommended to carefully go through the most important shareholders’ rights to really know your power in the company.

Wrap up

It is worth stressing again that we recommend shareholders for businesses to be at least 18 years.

Companies can issue new shares at any time by passing an ordinary resolution of the shareholders and filing a return of allotment with ACRA within 14 days of issuing new shares.

Shareholders enjoy various rights such as voting rights, rights to dividends, the right to attend general meetings and vote on company issues. They also have various responsibilities such as the one to pay the full amount for their shares or the one dealing with expressing their opinion and interests to the company secretary between general meetings.

If you have any further queries, feel free to reach out to us here.

Start a business in less than 3 hours with us. Talk to our experts today.

Subscribe to our newsletter

Our jam-packed newsletter covers monthly compliance updates, upcoming events and exclusive offers

subscribe_news

Other articles that might interest you

Related content

NEED SUPPORT?

We'd love to help. Share your contact details and we'll call you back

taking_your_questions
WhatsApp Us

Chat with us on WhatsApp from your mobile

Sleek SG QR Code Whatsapp
30D money back

30 Days Money Back Guarantee

Our refund policy:

We care about you – within 30 days from your purchase, if you’re unhappy with our services, we’ll refund our fee. Email or call us, and we’ll process the refund within five working days.

What it doesn’t cover:

We will not be able to refund Government fees once the application has been submitted, nor any third-party processing fees.

When it applies:

We cannot guarantee any specific legal outcomes when you use our services. For instance, a company registration might be filed correctly but still get rejected by the Company Registry for reasons beyond our control. We can only refund our fees for issues we are directly responsible for. In the case that you purchase a service and later change your mind, we can’t issue a refund.

Our customer support team is at your disposal for any questions or issue you may face.

Need help?

Our sales team is available from Mon - Fri 9am to 10pm (Singapore Time)