Manage Your Cap Table with Confidence
As you raise funds and your team grows, managing your company's share ownership structure becomes more complex. SAFEs, convertible notes, preference shares, and ESOPs all add layers of complexity that demand an expert hand.
And that expert hand doesn’t have to be your own, too:
Mistakes in filings or calculations can jeopardise future funding rounds and create legal liabilities. Mezzanine Enterprise provides expert corporate secretarial support for scaling companies. We manage all resolutions, ACRA filings, stamp duty calculations, and cap table updates, ensuring your company remains compliant and investor-ready.
What is Share Allotment?
Share allotment is the process of creating and issuing new shares in the company. This increases the total number of shares in circulation. Share allotments occur during:
Fundraising: This is the primary mechanism for fundraising. When you issue shares to investors, you are performing a share allotment.
Employee Stock Option Plans (ESOPs): When an employee exercises their stock options, new shares are allotted to them.
Bringing in New Partners: Shares are issued to a new co-founder or strategic partner to assign ownership to them.
The key result of a share allotment is dilution. Creating new shares reduces the ownership percentage of all existing shareholders.
How to Issue New Shares in a Singapore Company
Allocating shares is simple, outlined as follows:
Board Approval: The Board of Directors must pass a resolution to approve the issuance of new shares.
Shareholders' Resolution: Depending on your company's constitution, you may need a resolution from existing shareholders to approve the allotment.
ACRA Filing: File a "Return of Allotment of Shares" with ACRA within 14 days of the allotment.
Update Registers: Update the company’s internal Register of Members.
Issue Share Certificate: A new share certificate is issued to the new shareholder.
What is a Share Transfer?
A share transfer is the sale or gift of existing shares from one shareholder (the transferor) to another party (the transferee). The total number of company shares remains the same; only the ownership changes. Share transfers happen during:
Founder Exits: When a founder leaves and sells their stake to the remaining founders or an external party.
Secondary Sales: When an early investor sells their shares to a new investor.
Mergers & Acquisitions (M&A): When one company acquires the shares of another.
Internal Restructuring: When shares are moved between entities for legal or tax purposes.
How to Transfer Shares in a Singapore Company
Transferring shares is a fairly convoluted process, requiring the following steps:
Execute Transfer Form: The seller and buyer complete and sign the official Share Transfer Form.
Board Approval: The Board of Directors must pass a resolution to approve the transfer. Most company constitutions give the board the right to refuse a transfer.
Pay Stamp Duty: The buyer must pay stamp duty to the Inland Revenue Authority of Singapore (IRAS) on the transfer. The transfer is not legally complete until this is paid.
ACRA Filing: There is no immediate ACRA filing required for a standard share transfer. The change is reflected in the next Annual Return filing.
Update Registers: Update the company’s Register of Members.
Issue New Certificate: Cancel the old share certificate and issue a new one to the new owner.
How to Transfer Shares from a Singapore Company to a Foreign Entity
The process is identical. However, your corporate secretary or legal counsel will perform more extensive Know-Your-Customer (KYC) and due diligence checks on the foreign entity to comply with anti-money laundering regulations.
Crucial Governance: The Shareholders' Agreement
Before any allotment or transfer, always refer to your Shareholders' Agreement. This is a private contract between the company’s shareholders that dictates the rules of engagement, governing critical events like share transfers. This agreement is your company’s rulebook, preventing disputes and ensuring that changes in ownership happen in a structured, predictable way.
The Shareholders’ Agreement covers the following:
Right of First Refusal (ROFR)
The ROFR enables existing shareholders to buy shares from a selling shareholder before they are offered to an outside party.
Pre-emptive Rights
These rights give existing shareholders the right to participate in new share allotments to maintain their ownership percentage.
Vesting Schedules
These schedules dictate what happens to a founder's shares if they leave the company early.
Stamp Duty Implications: The Critical Difference
This is the most important financial distinction between the two processes.
Share Allotment: Issuing new shares is considered the creation of capital and is not a dutiable event.
Share Transfer: The buyer must pay stamp duty within 14 days of the transfer. The rate is 0.2% of the higher of the purchase price or the Net Asset Value (NAV) of the shares.
Failure to pay stamp duty on time will result in significant penalties from IRAS. ACRA will not recognise the transfer as valid without proof of stamp duty payment.
Share Allotment vs. Share Transfer: How to Scale Your Company
17 Jul 2025
As your company scales, its ownership structure will evolve. Whether you're raising a seed round, bringing in a key partner, or planning an exit, you will either be issuing new shares (allotment) or moving existing ones (transfer).
This guide breaks down the difference between the two, showcasing how they directly impact your company's capitalisation table (cap table), legal filings, and tax obligations.