What are the Clauses of Constitution?

Constitutional Clauses or the Clauses of the company’s Constitution (For a Pte Ltd by Shares):

The constitution of the company must contain the following, as stated under section 22 of the Companies Act (CA):

• The company’s name; (Name Clause)
• If the company is a company limited by shares, a statement that the liability of its members is limited; (Liability Clause)
• If the company is a company limited by guarantee, a statement that its members are liable to contribute up to a certain specified amount if the company is being wound up;
• If the company is an unlimited company, a statement that the liability of its members is unlimited;
• If the company is an unlimited company or a company limited by guarantee, the number of its members at the time of its application for registration;
• The full names, addresses and occupations of the members; (subscriber clause); and
• A statement that such members wish to form a company on the terms of the constitution and (where the company is to have a share capital) they agree to subscribe for a stated number of shares in the capital of the company.

These conditions are the minimum requirements for a company’s constitution. Other terms may also be included, such as:

• Issue, allotment and transfer of shares (For private companies limited by shares, the constitution is required to restrict the right to transfer company shares, and to limit its members to 50 at most.)
• Organisation and conduct of board and shareholder meetings including quorum
• Appointment and removal of directors
• Directors’ duties and powers
• Distribution of profits
• Capitalisation of profits
• Distribution of surplus assets in the event of voluntary winding up

Note that all clauses in the constitution especially the custom ones that you have added yourself must be in line with current legal and regulatory compliance requirements.

To avoid unnecessary stress and to have a peace of mind, you may wish to engage the Corporate Service Provider (CSP) like ACHI to customise your company’s constitution to suit your specific requirements or needs.