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Singapore – Key Issues For Your Business In 2015: Corporate Commercial.

10 March, 2015

 

Legal News & Analysis – Asia Pacific – Singapore – Corporate/M&A

 

Shares With Different Voting Rights


Presently, only private companies are allowed to issue shares with different voting rights. The amendments extend this right to public companies, thereby increasing their flexibility in capital management. However, the CA Amendment Act also puts in place certain safeguards for the shareholders of public companies, for instance: (i) the public companies must specify the rights for the different classes of shares in their constitutional documents and must clearly demarcate such different classes so that the shareholders know the rights attached to any particular class of shares; (ii) shareholders must approve the issuance of shares with different voting rights via special resolution; (iii) information on the voting rights for each class of shares must accompany the notice of meeting at which the resolution is proposed to be passed; and (iv) holders of non-voting shares will have equal voting rights on resolutions to wind up the company, or on those that vary the rights of non-voting shares.

 

Solvency Tests/Statements


Under the current legislative framework, there exists different solvency tests for different transactions. The amendments will introduce a uniform solvency test for all transactions, save for amalgamations. In addition, the solvency statement will, upon the amendments coming into force, take the form of a declaration in writing as opposed to a statutory declaration subject to the Oaths Act.


Capital Reduction


Currently, a company must meet the prescribed solvency requirements if it wishes to reduce its share capital. The solvency requirements do not apply only if the reduction is in respect of the cancellation of capital lost or unrepresented by available assets. Pursuant to the Amendment Act, the company is no longer required to meet the solvency requirements in the event that the reduction of share capital does not involve (i) a reduction or distribution of cash or other assets by the company; or (ii) a release of any liability owed to the company.

 

Rajah & Tann

 

For further information, please contact:

 

Desmond Wee, Partner, Rajah & Tann

desmond.wee@rajahtann.com

 
Rajah & Tann Corporate/M&A Practice Profile in Singapore 

 

 

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