What Is Authorised Share Capital?
- Authorised share capital can be defined as the largest amount of share capital that a company can issue. This amount will be agreed on when the company is being incorporated. This amount can be increased at a later date if the shareholders wish.
- The authorised share capital does not all have to be paid. It is the maximum value of the share capital and in some cases much of this value may remain unissued.
- The authorised share capital will tell you the maximum amount of share capital that the company can have and will set out the nominal value of each share.
- The articles of association of the company are important as they outline how much authorised share capital the company can potentially issue if changes need to be made down the line. It is common for companies to increase their share capital and if this change is required there are certain documents which will need to be filled out and submitted to the ACRA via a company secretary that is approved by ACRA.
- It should also be noted that the authorised share capital can be divided into different share classes such as preferable or redeemable, each of which are subject to different rights.
What Is Issued Share Capital?
- Issued share capital is the amount of capital that is actually paid by the shareholders. This will usually be a smaller amount than the authorised share capital and will be taken up by the shareholders of the company for money or another form of consideration. In other words, your investment & equity into the company.
- If a company is winding up, the issued share capital will be the amount of money that the shareholders will be liable for; therefore, the issued share capital will equal the amount of money that the shareholders will owe if all or part of the shares are unpaid.
- If the issued share capital has not all been paid up (paid for) when it is issued, i.e. if the shares are partly paid shares, each shareholder will be liable for the amount owed on any share that they hold if the company goes into liquidation.
How do I increase my paid-up capital?
1. Inject the necessary capital into your company bank account and send us a copy of the bank statement showing the capital injection.
2. Upon receipt of the proof of capital injection, we will prepare the following documents that are required to be lodged with the corporate authorities:
– Extraordinary General Meeting (EGM)
– Ordinary Resolutions (Authority to Issue Shares)
– Directors’ Resolutions (Allotment of Shares)
– Application of Shares
– Share Certificates
3. Upon obtaining your signature on the above documents, we will be able to lodge them with ACRA and get an update company profile showing the revised paid up capital for your Singapore company.
4. After you have injected the money into your company as paid-up capital, you can start using it towards business purposes. There is no lockup period as such.
Can I increase my paid-up capital if I do not inject cash into the bank capital?
Yes! Call us for more details. We will take a look at your accounts before we can advise in details.