Conversion of Shares
Companies issue preference shares to raise capital. There are two special types of preference shares: redeemable and convertible. Redeemable preference shares are preference shares with a “buy back” option, meaning the company may buy back the preference shares from the holder at a fixed price.
Convertible preference shares are preference shares with an option to exchange the preference shares for another instrument in the capital of the company, such as ordinary shares.
What you need to know
The conversion request can be presented at any time, except after the Board of Directors of the company has made a decision to convene the General Meeting. If a conversion request is made before the next General Meeting, it is considered to be received and will be decided after the conclusion of the meeting.
It is important to note that your may not issue preference shares or convert any issued shares into preference shares unless the relevant rights pertaining to those preference shares have been set out in your company’s memorandum or articles of association. These include voting rights, whether the dividends associated are cumulative or non-cumulative, and whether there is a right to participate in the company’s surplus assets and profits.
Here is some information to help you with the process of Conversion of Shares.
What is the purpose of converting shares?
Allows the lodger to file for conversion of shares from one class of share type to another. For instance, conversion from Ordinary Shares to Preference Shares.
How do I convert or redeem preference shares?
Convertible or redeemable preference shares are issued according to the terms set by the company at the time of subscription. However, some restrictions apply to redemption. Only fully paid-up redeemable preference shares may be redeemed, when there are profits available for such redemption (subject to statutory exceptions), and a prescribed notice of redemption must be lodged with ACRA.
What information is required to complete this transaction?
- Your Company’s Unique Entity Number (UEN) – A UEN is a 9- or 10-digit alphanumeric code issued by the Singaporean government to all entities that operate within Singapore
- Your Contact Number and Email Address
Step by Step Guide for Conversion of Shares
The conversion of shares is done via BizFile via the following steps:
- Go to bizfile.gov.sg
- Click on ‘File eServices’.
- Click on ‘Local Company’ and you’ll be re-directed to File eServices for ‘Local Company’.
- Click on ‘Update Share Information’, and scroll down
- Click on ‘Conversion of Shares’ and you’ll be re-directed to the Login Page.
- Enter the UEN and click on ‘Next’.
- The ‘Conversion of Shares’ page is displayed.
- Enter ‘Description of Conversion’ and Select an option for ‘Authorised By’.
- Enter details like ‘Date of Special Resolution’ and attach Copy of Special Resolution’
- Alternatively, select an option for ‘Constitution’ and attach Extract of Constitution or enter Description of Constitution.
- Enter the ‘Date of Conversion’ and select an option for ‘Does any corporation directly or indirectly hold any beneficial interest in shares?’
- Click on Share Capital Details.
- Select the Currency
- Convert the Shares from one class to another Class in the New Share Capital Section.
- Click on Shareholder Details.
- Click on Identification No./UEN.
- Enter Share Information and click on Edit Shareholding
- Verify all the details in the Preview page and click on ‘Confirm’; otherwise, click on ‘Exit Preview’ to make the necessary changes.
- Acknowledgement Page is displayed
How long will it take to file/process this transaction?
- This e-Service will take about 10 to 20 minutes to complete.
- This transaction will be approved upon submission.
How Can Tianlong Services Help You?
Tianlong Services is a professional accounting and secretarial firm and a registered ACRA filing agent for company incorporation, lodgement of annual return and filing of changes and updates of company particulars, officers and shareholders.
Contact us today if you need help with Conversion of Shares for your Singapore Company.
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