What is a Bearer Share
A bearer share is a share of ownership in a company that is not registered in the name of a specific owner. Instead, the bearer of the share certificate is considered the owner. This type of share has been associated with tax evasion and other illicit activities, and as such, most jurisdictions, including Singapore, have banned them.
Key points:
Singapore law prohibits bearer shares.
Only registered shares are allowed.
Bearer shares are linked to financial misconduct.
If you are considering setting up a company in Singapore, it's essential to comply with local regulations and ensure that your company issues only registered shares.
Registered Shares vs. Bearer Shares
The primary difference between registered shares and bearer shares lies in the ownership and transferability.
Registered Shares
Ownership: The owner's name is explicitly recorded in the company's share register.
Transfer: Transferring ownership requires updating the share register. This process is typically more secure and transparent.
Security: Ownership is traceable, reducing the risk of theft or fraud.
Bearer Shares
Ownership: The owner's name is not recorded; whoever physically holds the share certificate is considered the owner.
Transfer: Transferring ownership is as simple as handing over the share certificate.
Security: Ownership is anonymous, making it more susceptible to theft and fraud.
Due to the higher risk of illegal activities associated with bearer shares, most countries, including Singapore, have banned them.
Can Bearer Shares be Issued in Singapore
Bearer Shares in Singapore: A Strict No
Bearer shares cannot be issued in Singapore.
The Singapore government has explicitly prohibited the issuance of bearer shares. This is to prevent financial crimes such as money laundering and tax evasion often associated with bearer shares.
Only registered shares are allowed in Singapore, where the ownership of the shares is recorded in the company's register. This ensures transparency and traceability of shareholdings.
Risks of Bearer Shares
Bearer shares have been linked to significant risks and illegal activities. Here are some of the key issues:
Anonymity: The primary risk is the anonymity they provide. This makes it difficult to trace ownership, which can facilitate:
Tax evasion
Money laundering
Financing of illegal activities
Fraud and Theft: As ownership is not recorded, bearer shares are susceptible to theft or loss. Once stolen, the thief becomes the rightful owner.
Regulatory Scrutiny: Due to their association with financial crimes, bearer shares are under strict scrutiny by regulatory authorities. This can lead to increased compliance costs and potential legal issues.
These factors have led to a global trend of phasing out bearer shares in favor of registered shares, which provide greater transparency and security.
How Bestar can Help with Company Formation in Singapore
Bestar is a well-established company formation and accounting firm in Singapore, offering comprehensive services to assist businesses in setting up and managing their operations. Here's how we can help with company formation:
Core Company Formation Services
Company Incorporation: Bestar handles the entire process of registering your company with the Accounting and Corporate Regulatory Authority (ACRA), including:
Name availability check
Preparation of incorporation documents
Submission of application to ACRA
Obtaining a Certificate of Incorporation
Registered Office Address: Providing a reputable registered office address for your company.
Company Secretary Appointment: Appointing a qualified company secretary to fulfill statutory requirements.
Corporate Bank Account Opening: Assisting with opening a corporate bank account.
Additional Support Services
Business Consultancy: Offering expert advice on business structure, licensing, and other relevant matters.
Tax Planning: Helping you optimize your tax position through effective tax planning strategies.
Accounting and Bookkeeping: Providing comprehensive accounting and bookkeeping services to ensure financial compliance.
Audit and Assurance: Offering audit and assurance services to enhance credibility and investor confidence.
Benefits of Choosing Bestar
Expertise: Our team of professionals has in-depth knowledge of Singapore's company formation process and regulatory environment.
Efficiency: Bestar streamlines the incorporation process, saving you time and effort.
Comprehensive Services: We offer a wide range of services beyond company formation, providing end-to-end support for your business.
Customer Focus: Bestar is committed to providing excellent customer service and support.
In essence, Bestar acts as a one-stop shop for company formation and related services in Singapore, making the process smooth and efficient for entrepreneurs and businesses.
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