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Paidup capital for a new company

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New_Global_Trader
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Paidup capital for a new company

Postby New_Global_Trader » Sat, 12 Mar 2011 11:18 am

Dear Friends,

Can a loan(100k) from a Singaporean company or SPR/Citizen can be used for paidup capital for a new company. I want to apply for a entrepass with this new company.

If loan can be used for a paidup capital, how much should be the interest for approx 3 months.

Or the paidup capital should be transferred in the company bank account from outside singapore only.

Kindly advise.

Warm regards
RG

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Strong Eagle
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Postby Strong Eagle » Sat, 12 Mar 2011 9:09 pm

You are required to demonstrate $50,000 paid up capital by being able to show a bank statement in the name of the company with a $50,000 balance.

A loan doesn't work. Paid up capital mean that $50,000 worth of shares have been purchased. If you are loaning a person or entity $50,000 to buy shares that is outside of the books of the company.

Here is what MOM expects in terms of a balance sheet.

CASH IN BANK: $50,000

TOTAL ASSETS: $50,000

SHAREHOLDER EQUITY: $50,000

TOTAL LIABILITIES AND CAPITAL: $50,000

So, they can loan you the money personally. They cannot loan it to the company as that is a loan and not equity contribution.

You need to put $50,000 into the bank in exchange for the shares. What you do next with the money is entirely up to you.

New_Global_Trader
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Paidup capital for a new company

Postby New_Global_Trader » Sun, 13 Mar 2011 12:08 am

Dear SE,

Can I have the permission to send you a PM.

Regards
RG

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sundaymorningstaple
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Postby sundaymorningstaple » Sun, 13 Mar 2011 12:16 am

You need two more posts (5) before your send function will activate to enable you to send a PM.

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aargon
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Re: Paidup capital for a new company

Postby aargon » Sun, 13 Mar 2011 12:25 am

Dear SE,

Can I have the permission to use the toilet please.

Regards
A

:o
Everybody was KungFu Fighting.....

New_Global_Trader
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Re: Paidup capital for a new company

Postby New_Global_Trader » Sun, 13 Mar 2011 12:28 am

aargon wrote:Dear SE,

Can I have the permission to use the toilet please.

Regards
A

:o


Thanks, 1 down, 1 to go.

Regards
RG

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Strong Eagle
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Re: Paidup capital for a new company

Postby Strong Eagle » Sun, 13 Mar 2011 7:57 am

New_Global_Trader wrote:Dear SE,

Can I have the permission to send you a PM.

Regards
RG


I generally prefer to answer questions on the board. Unless you have confidential information to reveal, please post your questions here.

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Strong Eagle
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Re: Paidup capital for a new company

Postby Strong Eagle » Sun, 13 Mar 2011 7:58 am

aargon wrote:Dear SE,

Can I have the permission to use the toilet please.

Regards
A

:o


Not until your eyeballs turn yellow. Water conservation and all that.

New_Global_Trader
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Re: Paidup capital for a new company

Postby New_Global_Trader » Sun, 13 Mar 2011 10:37 am

Strong Eagle wrote:
aargon wrote:Dear SE,

Can I have the permission to use the toilet please.

Regards
A

:o


Not until your eyeballs turn yellow. Water conservation and all that.


Thanks SE.

This take cares of the last one too.

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Strong Eagle
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Re: Paidup capital for a new company

Postby Strong Eagle » Sun, 13 Mar 2011 3:54 pm

New_Global_Trader wrote:Dear SE,

Can I have the permission to send you a PM.

Regards
RG


As I said, I prefer not to answer in PM. To answer your questions.

You want to form a company with a SPR. This you can do. You can be a shareholder. You will not be able to work for the company without an employment pass. There is nothing to prevent your SPR friend from contracting with you in your home country. You just cannot work for the company in Singapore.

I assume that you plan on doing your goods trading through the company that your SPR friend will set up. Again, he can contract you to do the trading but the company (and your SPR friend) actually earns the profit, which can be distributed to you as a shareholder. Obviously you will want to be a 100 percent shareholder or profits must be distributed equally by shares held to all share holders.

Or, this company could lend you money. This is somewhat trickier as there are laws about inside dealing... lending money to directors and shareholders, for example.

Why don't you just start your company in your home country, earn the cash you need to file for an Entrepass, then do it?

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Paidup capital for a new company

Postby New_Global_Trader » Sun, 13 Mar 2011 8:43 pm

Dear SE

Thanks.

But my question is, will ACRA/MOM will ask for the source of funds used as the paid up capital for the new company(through which I will apply for my entre pass).

My 99% payments come through paypal. Indian banking regulator (Reserve Bank of India (RBI)) does not like paypal very much. Very recently RBI put up a 500 USD limit on PP transactions, and my buyers do not have that much time to make 3-4 payments for each purchases. This is causing lots of problems for me.

Also, taxes are low in SG, which is additional attraction for me.

Regards
RG

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Re: Paidup capital for a new company

Postby pacads » Mon, 14 Mar 2011 2:32 am

New_Global_Trader wrote:Dear SE

Thanks.

But my question is, will ACRA/MOM will ask for the source of funds used as the paid up capital for the new company(through which I will apply for my entre pass).

My 99% payments come through paypal. Indian banking regulator (Reserve Bank of India (RBI)) does not like paypal very much. Very recently RBI put up a 500 USD limit on PP transactions, and my buyers do not have that much time to make 3-4 payments for each purchases. This is causing lots of problems for me.

Also, taxes are low in SG, which is additional attraction for me.

Regards
RG


ACRA will not ask. The bank MAY ask but it shouldn't be an issue based on previous experience. They just ask routinely.

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Strong Eagle
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Re: Paidup capital for a new company

Postby Strong Eagle » Mon, 14 Mar 2011 8:24 am

New_Global_Trader wrote:Dear SE

Thanks.

But my question is, will ACRA/MOM will ask for the source of funds used as the paid up capital for the new company(through which I will apply for my entre pass).

My 99% payments come through paypal. Indian banking regulator (Reserve Bank of India (RBI)) does not like paypal very much. Very recently RBI put up a 500 USD limit on PP transactions, and my buyers do not have that much time to make 3-4 payments for each purchases. This is causing lots of problems for me.

Also, taxes are low in SG, which is additional attraction for me.

Regards
RG


ACRA will not care about the source of funds... they will want to see $50,000 in paid up capital in the bank and shares issued for same.

As I said, though, you need to be careful about the company that you and your friend are setting up loaning you money. Such loans are looked upon quite suspiciously.

For example, if, in your new company, you paid in $50,000 for shares, then immediately loaned the money back out to yourself, there would be no operating capital available.

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Re: Paidup capital for a new company

Postby New_Global_Trader » Mon, 14 Mar 2011 11:57 am

Strong Eagle wrote:
New_Global_Trader wrote:Dear SE

Thanks.

But my question is, will ACRA/MOM will ask for the source of funds used as the paid up capital for the new company(through which I will apply for my entre pass).

My 99% payments come through paypal. Indian banking regulator (Reserve Bank of India (RBI)) does not like paypal very much. Very recently RBI put up a 500 USD limit on PP transactions, and my buyers do not have that much time to make 3-4 payments for each purchases. This is causing lots of problems for me.

Also, taxes are low in SG, which is additional attraction for me.

Regards
RG


ACRA will not care about the source of funds... they will want to see $50,000 in paid up capital in the bank and shares issued for same.

As I said, though, you need to be careful about the company that you and your friend are setting up loaning you money. Such loans are looked upon quite suspiciously.

Hi.. We will make proper loan documents + my new company will pay interest on the same. I donot have any other option, but to work with a friend, make profits, loan it to my self, form a new company and apply for a entrepass. I am also keeping my fingers crossed that rules does not change within next 6 months.

For example, if, in your new company, you paid in $50,000 for shares, then immediately loaned the money back out to yourself, there would be no operating capital available.

We will take a loan of about 75-100K from the older company so that my entre pass application is not rejected. Regarding operating capital, in starting, We will re-pay this loan in less than 6 months. We will not be selling any items in SG, We will be exporting from SG (Any/all items that are cheap and good quality, we have identified some items).

I thank you all for your time and effort.

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ksl
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Postby ksl » Mon, 14 Mar 2011 12:31 pm

Can i have a link of what you are selling? Have a friend based here in Sing looking for new products, for global sales.


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