dela2927 wrote: ↑Thu, 04 Apr 2024 3:37 pm
@Strong Eagle, thanks for your response. Does your advice also apply if I want to transfer my shares to the majority shareholder, but he does not want to accept them?
I've never been in the situation of wanting to divest shares to a majority shareholder who didn't want to take them, so understand that what I am about to write is what I would do if I were hypothetically in your shoes.
Let’s get a definition out of the way for clarity: You are the TRANSFEROR of shares since you have the assets and are conveying them to someone else.
Next, you want to login to Bizfile:
https://www.bizfile.gov.sg/ngbbizfilein ... epage.jspx
This is the official Registrar records for the ACRA, and when the Companies Act is referring to “lodge with the Registrar,” they are referring to making updates in Bizfile.
You want at least three things from Bizfile. First, you want to verify all shareholders of record and their holdings. You need to make sure that you actually own the shares you think you own. You also want all other owners of record, names, addresses, etc, and you want the name of the director and the registered mailing address, where you will file your intent to transfer shares. All this will be in Bizfile.
Next, you want to download the Memorandum of Incorporation (or maybe constitution or articles or maybe certificate of formation)… the name has changed over the years… the governing document for your company. If the MOI is basically the boilerplate recommended by the ACRA (and most small pte ltd’s are), then there are two things to look for. Those items are the process for transferring shares and the instrument required to initiate the transfer.
Here is the boilerplate from a sample constitution on the ACRA website.
Two points to note: The request to transfer can be “in any usual or common form”. Your MOI may read the same or different but this tells you how to write to the board of directors with your intent to transfer,
Second, the directors may decline to register the transfer, one of the conditions may be, “the directors do not approve of the transferee.” This might come up as an excuse if you were to sell your shares to PNGMK but if you are transferring to an existing shareholder, this is not a valid reason, and neither are the other reasons, so you have an absolute right to transfer the shares, I would make this point in your letter to request transfer.
So, send your letter requesting transfer of shares to the managing or only director at the registered address. If your request is refused or nothing is done, you send a second letter threatening action because the company has not reason not to comply with your request to transfer.
I refer you to Section 129 of the Companies Act. It is pretty clear that the company must, within 30 days, supply you with a valid reason for refusal to transfer, and if they do not, they are subject to financial penalties. And as you have seen from the MOI, there is no valid reason that the company can cook up.
If a letter to the director quoting the applicable company law doesn’t force the stalled issue, then another letter threatening court action is in order, again delivered to the registered address. And then, do it… contact the SCT to determine the process for filing a complaint and invoking the application of fines against the director and the company.
That’s what I would do.
