A private limited company in Singapore is limited in terms of shares when it is registered. The shares of each shareholder of the company are calculated according to the number of shares held by each person and how much each share is worth.

At different times, the shares of different investors may have different nominal values.

This shareholding structure facilitates later changes in the company such as the issuance of additional shares, transfers, premiums, etc.

When the company needs to issue additional equity shares, it first needs to pass a board resolution to decide how many new shares of equity the company needs to issue and how much each share is worth. Then, the company informs the existing shareholders of the company and lets them decide if they want to subscribe to this additional share issue. If the existing shareholders make it clear that they do not want to subscribe, then the company’s directors can recommend an equity subscription to investors outside the company for financing.

Once the company has determined the number and identities of investors and the invested amount, the company lawyer prepares the share subscription contract and the company secretary prepares the company’s resolution, subscription letter, and ACRA amendment document. After the filing, the company can obtain a new registration document, Bizfile, for the issue of additional shares.

If the share price of the company at the time of the issue exceeds the net value of the company’s existing shareholding (resulting in a premium), the premium will be added directly to the company’s capital.