How to decide number of company share

How many shares should a newly registered company issue? Is common question for all business owner .

Number of share represent total fund you willing to invest into Company .

With effect from 2006, Companies Act had abolished par value of the share , which means that value of shares is varied and is decided and agreed between company and shareholder .

Example : You can have 100 ordinary share with S$1 each OR 100 ordinary share with S$10 each

Company is required to registered with at least 1 ordinary share with minimum value of S$1. And this share will normally issue to founder of the company . ( it can be person or company )

For most companies, there won’t be a maximum number of shares they can issue,unless its company constitution stated so.

How to decide number of shares

For newly registered company, Company constitution will stated number of share and its value . And this number will remain the same although there is changes at later time .

You allowed to increase the number of share at any later time with proper documentation.

Factor determine number of share

  • type of share ( ordinary share, preference share, employee share scheme)
  • size of the company (SME / MNC)
  • number of shareholder
  • performance of company ( company might need more investment fund to complete its vision )
  • potential project ( need more fund to invest in machine/ operating cost )

What is the alternative way

Company may consider to get loan from the director / shareholder / related parties if they opt out increase in paid up option .

Related Article :

What is par value of share

What is shareholder right

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