Share Certificate

Issuance of Share Certificate

Definition of Share Certificate (What is a Share Certificate?)

A share certificate is a written document signed on behalf of a corporation that serves as legal proof of ownership of the number of shares indicated. A share certificate is also referred to as a stock certificate.
A certificate under the common or official seal of a company specifying any shares held by any member of the company shall be prima facie evidence of the title of the member to the shares.
Every share certificate shall be under the common seal of the company or, in the case of a share certificate relating to shares on a branch register, the official seal of the company and shall state as at the date of the issue of the certificate —

• a) the name of the company and the authority under which the company is constituted;
• b) the address of the registered office of the company in Singapore, or, where the certificate is issued by a branch office, the address of that branch office; and
• c) the class of the shares, whether the shares are fully or partly paid up and the amount (if any) unpaid on the shares.

Failure to comply shall affect the rights of any holder of shares. If default is made in complying with issuance of share certificate, the company and every officer of the company who is in default shall be guilty of an offence in Singapore.

A Share Certificate is:

• For issuance of fully paid shares only.
• A Share Certificate typically needs to be signed by two directors, or one director and the company secretary of the company.
• A Share Certificate is not required to be affixed with Common Seal when it is signed by two directors, or one director and the company secretary of the company.
• A certificate that evidences the holder’s title to shares.
• Required for any type of equity investment.
• A very important document that must be kept in safe custody.
• A certificate that evidences the holder’s title to shares. You may use this certificate for ordinary shares or a different class of shares.

 

Information from Share Certificate

When companies issue shares in the market, shareholders who buy in are issued a share certificate. The share certificate basically acts as a receipt for purchase and ownership of shares in the company. The document certifies registered ownership of shares from a particular date.

Key information on a share certificate includes:	Certificate number Company name Company Unique Entity Number (UEN) (aka: registration number) Shareholder name Number of shares owned Class of shares Issue date of shares Amount paid (or treated as paid) on the shares
When a share certificate is to be issued	For Share Allotment; Or For Share Transfer
Time frame to adhere with law	Within two months (60 days)
Note: In adherence to compliance, a company must issue a share certificate when any shares are allotted (issued) or existing shares are transferred. The company must issue a share certificate within two months (60 days) of the issue or transfer of any shares. Companies may issue just one certificate for all the shares issued or transferred at a particular time, except if a shareholder requests separate certificates.

 

Click here to view the sample share certificate (Without Common Seal) for Private Limited Companies.

 

Voting rights without share certificate

Sometimes a shareholder with a stock certificate can give a proxy to another person to vote the shares in question. Similarly, a shareholder without a share certificate may give a proxy to another person to allow them to vote the shares in question. Voting rights are defined by the Constitution of the Company and Company Act.

Replacement Share Certificate

A share certificate that is damaged, lost or stolen can be reissued with a replacement certificate in respect of the same number of shares. The shareholder in such a case must return the damaged document to the company before a replacement can be issued. At this time, the shareholder may also exercise the right to be issued a single certificate or separate certificates.

Central Depository Account

Today, in modern financial markets, individual investors rarely take physical possession of their share certificates. In fact, some countries, such as Sweden, have completely abolished the issue of share certificates as proof of share ownership in a company and have streamlined the process of registering owners via electronic registration. In the United States, the Central Securities Depository (CSD) is responsible for electronically holding shares, either in certificated or uncertificated (dematerialized) form, so that ownership can be easily transferred through a book entry rather than the transfer of physical certificates.

CDP Account in Singapore

A CDP Account is a Central Depository Account (Henceforth referred to as CDP)
If you want to buy and own your first shares, you will need to set up a CDP. A CDP account acts like your personal safe for your stocks. Whenever you buy a share in a listed company through the open market, it gets deposited into your CDP account.

Set Up A CDP Account In Singapore

There are 2 easy ways for you to set up your own CDP account.

#	Options	Procedures
1	Do-It-Yourself Via SGX	Head to SGX’s website to sign up for a CDP account at: https://www1.cdp.sgx.com/sgx-cdp-web/login You will need to fill up the application form (which can be downloaded from the link provided in the website), and provide a photocopy of your NRIC or passport. ​Then, you will also need to attach an original or e-statement of either: Bank statement; CPF statement; or Latest Notice of Assessment (NOA) for income tax. Note: The statement needs to be dated within the last three months (from your submission date). This is simply to allow SGX to do a confirmation check that the address in your NRIC tallies with your current address. Once you have all three required documents, you will need to mail it physically to: The Central Depository (Pte) Limited 11 North Buona Vista Drive #06-07 The Metropolis Tower 2 Singapore 138589
2	Get Your Brokers To Do It For You	The other way to apply for a CDP account is to get your broker to do the work for you. While you are signing up for a brokerage account, your broker will courteously ask you if you have a CDP account. You can simply tell your broker to sign up for a CDP account on your behalf using the information that you provided on your brokerage sign up form. All you need to do is to sign an extra ‘CDP application form’ while signing up for your brokerage account.

 

Title ownership

A share certificate can be in either registered form or bearer form. A registered share certificate is only evidence of title ownership, while a bearer share certificate, now uncommon, entitles the holder to exercise all legal rights associated with the stock.

Removal of requirement for common seal

With effect from 31 Mar 2017, companies and limited liability partnerships (LLPs) are no longer required to use the common seal in the execution of documents as a deed, or other documents such as share certificates. Companies and LLPs can execute documents by having them signed by authorised persons as below mentioned.

Here are some questions and answers pertaining to abolishment of common seal in Singapore

Question	Answer
Can companies and LLPs choose to retain the use of a common seal?	Yes, companies and LLPs can choose to retain the use of a common seal based on business needs.
What are the safeguards for ensuring authenticity and authority of documents executed by companies and LLPs after the requirement for a common seal is removed?	Authorised persons for companies: A director and the secretary of a company; Two directors of a company; or A director of a company in the presence of a witness who attests the signature
	Authorised persons for LLPs: Two partners of an LLP; or A partner of an LLP in the presence of a witness who attests the signature.
If a company’s constitution has specific provisions on how a deed or document should be executed, can it still execute a deed or document by way of the new “authorised persons” option as listed above?	Yes, a company can still choose to execute the deed or document by way of the new “authorised persons” option, subject to it obtaining legal advice in cases of doubt.
For an existing company, if it wishes to remove the provisions of the common seal from its constitution, how should this be done?	This can be done by amending its constitution, upon obtaining legal advice, where necessary.
For a newly incorporated company, what should a company do if it chooses not to have a common seal?	The newly incorporated company should ensure that its constitution does not contain any provision for a common seal. Note that if the company intends to adopt the Model Constitution, it should take steps to opt out from the provisions referring to the common seal.

 

Customisation of the Constitution of the Company

At ACHI Biz, we provide the customised Constitution of the Company according to the requirements of the business for any new incorporations. Hence, you may no longer be required to pay much attention to this removal of common seal requirement.

Seeking professional service provider for issuance of Share Certificate

Where your existing Private Limited Company has not yet issued the share certificates for whatever the reasons, ACHI Biz could assist you to adherence with compliance for issuance of share certificates for both share allotments and share transfers. Hence, many shareholders and directors in private companies prefer to engage a Corporate Service Provider (CSP) like ACHI Biz to assist with issuance of share certificates and for various other matters which may arise in the course of the transaction.

Please refer to SERVICES if you wish to proceed or CONTACT us for more information.