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Company limited by guarantee
Liability limited to amount member agreed to guarantee
Any company unless registered and incorporated as a pte. company
Private Company Features
- CAs 18(1)
- 1. Cannot freely transfer shares
- 2. No more than 50 members
- 3. Not allowed to raise funds from the public
Exempt private company
- Automatic - No need to register
- CAs 4(1)
- No corporate member
- No more than 20 members
- CAs 162-163: Not prohibited frm making loans to directors
- 8th Schedule: Not required to file F/S w/ Annual Returns
- s205c: Exempt frm audit requirement if annual revenue < $5M
4 Situations in which Co B is a sub. of Co A:
- CAs 5
- 1. Co A controls the composition of the board of directors of Co B
- 2. Co A controls more than half the voting power of Co B
- 3. Co A controls more than half the issued share capital of Co B
- 4. Co B is a subsidiary of Co C, which is a subsidiary of Co A
- CAs 6
- Holding-sub relationshipSub of common holding companies
Can a subsidiary buy shares of the Holding Co?
- CAs 21
- No. This is why determination of relationship of companies is important.
1.What is the min. no. of persons needed to form a company?
2.What is the min. no. of directors which a co. must have?
- 1.CAs 17(1) and 20A: One
- 2.CAs 145(1): One resident in SG
One who undertakes to form a company with reference to a given project
Consequences of Separate Legal Personality
Name related cases
- Lee v Lee's Air Farming Ltd 
- CAs 19(5)
- 1. Ability to sue and be sued: Foss v Harbottle 
- 2. Having perpetual succession: Re Noel Tedman Holdings Pte Ltd 
- 3. Power to hold land: Macaura v Northern Assurance Co Ltd 
Lifting the corporate veil
(a) When in general?
(b) In common law?
Disregarding separate personality of the company and ascribing responsibility for acts done by co to members/SHs of company.
- The law makes a co's members liable to a third party
- (a)Lifted to prevent abuse of corporate structure
- (b)i. Company is not a separate entity
- ii. Corporate form has been abused to pursue and improper purpose not for a bona fide transaction
What are required to be stated in the Memorandum?
- 1. Name of the co
- 2. Liability - Ltd or unltd
- If guarantee, how much to contribute indiv.
- 3. Full names, addresses & occupations of subscribers
- 4. Clauses:
- (a) Subscribers want to form the co in pursuance of memorandum
- (b) Subscribers agree to take respective shares
How can company alter the Memorandum after incorporation?
Is it necessary to set out a company's objects in its Memorandum of Association?
1 Apr 2004
Before: A company's capacity to carry on business is restricted by objects stated in its Memorandum - CA s22(1)(b)
After: A co has full capacity to carry on any business or activity - CA s23(1)
Are companies obliged to adopt Table A?
No. However, if they omit to lodge a set of articles with ACRA, it will be deemed to be governed by the provisions of Table A.
Forms of SH's Agreement
- (a) Between co and SHs
- (b) Between SHs
- (c) Between some SHs
Advantage and Disadvantage of SH's Agreement
- Cannot be altered by majority vote
- Only modified by unanimous agreement
- More flexible - escapes regulation of CA
- Limited Scope:
- Not enforceable by SH who is not party to contract
- Cannot compel co to comply if not incorporated in Articles, can only sue for damages
Can a company issue new shares with 2 votes per share?
- CA s64
- (1)One share, one vote
- o It is compulsory
- (5)Section shall apply to a public company having a share capital
Legal v Beneficial Interests
- Formal interest or title of the property
- Actual benefit of the property
Ex: Consider a trust situation
Does the company have the responsibility of ascertaining whether a registered member (legal owner) is also a beneficial owner?
- CA s195(4)
- Subject to this section, no notice of any trust expressed, implied or constructive shall be entered in a register or branch register or be receivable by the Registrar and no liabilities shall beaffected by anything done in pursuance of subsection (1), (2) or (3) or pursuant to the law of anyother place which corresponds to this section and the corporation concerned shall not be affectedby notice of any trust by anything so done.
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