How to transfer business ownership in Singapore? Transferring business ownership in Singapore can be a complex process, and having a well-thought-out exit strategy is essential for a smooth transition. Whether you’re selling your company, passing it on to a family member, or bringing in new partners, there are several factors to consider.
Firstly, you’ll need to determine the corporate structure of your company and the type of ownership change that you’re seeking. For example, if you’re selling your company, you may want to consider a share sale or an asset sale. A share sale involves selling the shares of the company to the buyer, while an asset sale involves selling the assets of the company to the buyer.
Secondly, it’s important to consider the tax implications of the transfer of ownership. Depending on the type of ownership change, there may be tax consequences that need to be addressed. For instance, if you’re transferring ownership to a family member, you may be subject to gift tax. Alternatively, if you’re selling your company, you’ll need to consider capital gains tax and other taxes that may apply.
Thirdly, you’ll need to think about the legal and regulatory requirements that apply to the transfer of ownership. Depending on the corporate structure of your company, there may be specific legal and regulatory requirements that need to be followed. For example, if your company is a private limited company, you’ll need to comply with the Companies Act and other relevant legislation.
In summary, transferring business ownership in Singapore requires careful planning and consideration of various factors, including the corporate structure of the company, the type of ownership change, tax implications, and legal and regulatory requirements. Seeking professional advice can help ensure a smooth and successful transfer of ownership.
HOW TO TRANSFER BUSINESS OWNERSHIP IN SINGAPORE
FOR SOLE PROPRIETORSHIP OR PARTNERSHIP
- Business owner (the sole proprietor/partner or authorized representative, as applicable) must submit the changes to the Registrar online via BizFile+ using SingPass or CorpPass within 14 days of the date of the change if he intends to transfer business ownership or if any details of the Sole-Proprietorship or Partnership change. A penalty will be applied if changes are notified late.
- Changes such as those to a company’s name, address, or activity are not subject to endorsement or approval. However, some modifications, such as the addition or deletion of partners, require consent or endorsement.
- After the first submission date, the endorsement must be completed within 14 days. If the requisite endorsement is not made within the allotted 14 days, the application will expire and the transaction will be refused. The single proprietor, partner, or authorized representative must submit a new transaction and pay the filing fee once more in this scenario.
- The contract signed during acquisitions will be subject to stamp duty for the company intending to transfer corporate ownership. When shareholders want to transfer shares, they must pay the stamp duties to the Inland Revenue Authority of Singapore (“IRAS”).
- There will always be a “transferor” and a “transferee” in any transaction [that involves the transfer of shares]. The transferee is the new shareholder who will be receiving the share, whereas the transferor is the current shareholder who is giving up the share.
- The duty is due based on the higher of the share’s real price or worth. The value of the shares [transferred] will be determined using the average price on the Singapore Stock Exchange. If there is no accessible average price as of the document’s date, the most recent share price might be utilized.
- For private firms, the value of the transferred shares will be determined by the net asset value (NAV) or the allotment price of the shares in the target Singapore company. The NAV will rely on the rights associated with each class of share in the event that there are various share classes (for example, preference shares in the target firm).
Refer to the Singapore company formation guide if you need more information about forming a company in Singapore.
E-SERVICES FOR UPDATING BUSINESS OWNERSHIP
Accounting and Corporate Regulatory Authority (ACRA)
To use the following e-Services, log into the BizFile portal:
File a notice of discontinuance (resignation)
The resignation of a director or business owner should be reported to ACRA. This applies to local businesses, limited partnerships, and limited liability partnerships.
File a Notice of Termination (disqualification)
Notify ACRA of a director or business owner’s disqualification. This applies to limited liability partnerships and local companies.
Relin Consultants will help you through the process of transferring your business ownership in Singapore. Reach out to us for more information at Relin Consultants
What is the process for transferring ownership of a business in Singapore?
The process for transferring ownership of a business in Singapore typically involves the following steps:
- Negotiate and agree on the terms of the transfer with the other party
- Conduct due diligence on the business to be transferred
- Prepare and sign a sale and purchase agreement
- Register the transfer with the Accounting and Corporate Regulatory Authority (ACRA)
What documents are required for the transfer of business ownership in Singapore?
The following documents may be required for the transfer of business ownership in Singapore:
- Sale and purchase agreement
- Business registration documents (e.g., ACRA BizFile profile, business licence, etc.)
- Financial statements
- Tax returns
- Contracts with customers and suppliers
- Leases or deeds for any property associated with the business
Are there any legal requirements for transferring business ownership in Singapore?
Yes, there are legal requirements for transferring business ownership in Singapore. For example, the transfer must be registered with ACRA, and the parties involved must comply with the requirements of the Companies Act and other relevant legislation.
Are there any taxes or fees associated with transferring business ownership in Singapore?
Yes, there may be taxes and fees associated with transferring business ownership in Singapore. For example, if the business being transferred is a registered company, there may be fees payable to ACRA for the transfer of ownership. Additionally, there may be taxes payable on any capital gains arising from the transfer.
Can business ownership be transferred?
Yes, business ownership can be transferred to another person or entity through sale, gift, inheritance, or transfer of stocks or assets in the case of a corporation or LLC. However, the transfer process can involve legal compliance and financial considerations, so it’s important to consult with professionals to ensure the transfer is done properly and all legal requirements are met.
How do I change ownership of Acra?
To change ownership of a business registered with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore, you will need to follow these steps:
- Obtain the necessary documents such as Share transfer form, Board resolution, Updated business profile
- You can file the share transfer online through ACRA’s BizFile+ portal or in person at the ACRA office. You will need to pay a fee to process the transfer.
- Depending on the nature of your business, you may need to update other government agencies and stakeholders, such as the Inland Revenue Authority of Singapore (IRAS), the Central Provident Fund (CPF) Board, or the Ministry of Manpower (MOM).
- You will need to update any contracts, licences, or agreements with third parties, such as suppliers, customers, or landlords.
How do I transfer ownership of a private limited company in Singapore?
- Check the company’s constitution for any restrictions or approval requirements
- Agree on the terms of the transfer with the new owner
- Prepare and sign a share transfer agreement and form, and a board resolution
- Update the business profile with the new owner’s information
- File the share transfer with ACRA and pay the fee
- Update contracts and licenses with third parties, and update other government agencies and stakeholders as necessary.