The Corporate and Accounting Laws Amendment Act 2025 (CALA 2025), which commenced on 6 May 2026, has introduced significant changes to how Singapore companies may conduct selective share buybacks. If your company has ever repurchased its own shares — or is considering doing so — understanding these new requirements is essential for directors and company secretaries alike.

This guide explains what selective share buyback is, how CALA 2025 has changed the approval framework, and what practical steps company secretaries must take to remain compliant.

What Is a Share Buyback?

A share buyback (also called a share repurchase) is when a company purchases its own shares from existing shareholders. Under the Singapore Companies Act (Cap. 50), companies may buy back their shares to:

  • Return surplus cash to shareholders
  • Improve earnings per share
  • Support the share price
  • Prevent unwanted takeovers
  • Fulfil obligations under employee share option or share award schemes

Bought-back shares may be held as treasury shares or cancelled.

Equal Access Versus Selective Share Buyback

Singapore law distinguishes between two types of share buyback:

Equal Access Buyback

The company makes a general offer to all shareholders on identical terms — price, proportion, and conditions are the same for everyone. This is the standard route and requires only an ordinary resolution of shareholders (or, if authorised by the constitution, can be done without a resolution in certain circumstances).

Selective Share Buyback

The company buys back shares from specific shareholders only, on terms that may differ from those offered (or not offered) to other shareholders. Because of the inherent inequality — some shareholders are being bought out at potentially advantageous terms while others are not — the Companies Act imposes stricter requirements.

Common reasons for a selective buyback include buying out a departing founder or investor, restructuring the shareholding before a fundraising round, or facilitating an exit for a specific shareholder class.

The Old Regime: What the Law Required Before CALA 2025

Prior to CALA 2025, a selective share buyback required:

  1. A special resolution passed by shareholders at a general meeting (requiring 75% of votes cast), with the specific terms of the buyback set out in the resolution; and
  2. The selling shareholders and their associates were not permitted to vote on the special resolution — a safeguard against self-dealing.

This framework was broadly workable, but concerns were raised that a 75% majority of disinterested shareholders could still pass a selective buyback that was unfair to minority shareholders who were not participating in the buyback.

CALA 2025: The New Double-Tier Approval Requirements

CALA 2025 introduces a double-tier approval mechanism for selective share buybacks. This change aims to better protect minority shareholders and ensure greater fairness in transactions that benefit only selected shareholders.

Under the new framework (effective 6 May 2026), a selective share buyback requires two separate approvals:

Tier 1: Special Resolution of All Shareholders

A special resolution (75% majority) must still be passed at a general meeting by all shareholders. The selling shareholders and their associates remain disqualified from voting. The resolution must set out the material terms of the proposed buyback, including:

  • The identity of the selling shareholders
  • The number of shares to be repurchased
  • The price or pricing formula
  • The rationale for the selective (rather than equal access) approach

Tier 2: Approval of Minority Shareholders

In addition to the Tier 1 special resolution, a separate resolution must be passed by the minority shareholders — that is, shareholders who are not participating in the buyback and are not associates of the selling shareholders. This second resolution requires a simple majority (more than 50% of votes cast by eligible minority shareholders).

The rationale is straightforward: those who are left behind after the buyback — and whose proportional stake in the company will change — should have an independent say in whether the transaction proceeds.

Key Point: Both Resolutions Must Pass

The selective share buyback cannot proceed unless both resolutions are passed. Failure of either — even if the other passes comfortably — means the buyback cannot go ahead without fresh shareholder approval on revised terms.

Timing and Process: How the Two Resolutions Work in Practice

The two resolutions may be put to shareholders at the same general meeting or at separate meetings, provided both are passed before the buyback is executed. In practice, most companies will convene a single extraordinary general meeting (EGM) and table both resolutions together.

The notice of meeting must clearly explain both resolutions, identify the selling shareholders, and provide sufficient information for all shareholders — particularly the minority — to make an informed decision. ACRA expects the disclosure to be clear and not misleading.

What Must Be Disclosed to Shareholders?

CALA 2025 has reinforced the disclosure obligations for selective share buybacks. The explanatory circular or notice accompanying the resolutions should include:

  • The full terms of the proposed buyback agreement
  • The identity and relationship of the selling shareholders to the company and to other shareholders
  • A valuation or independent opinion on the fairness of the buyback price (where appropriate)
  • The company’s reasons for proceeding on a selective (rather than equal access) basis
  • The impact of the buyback on the remaining shareholders’ shareholding percentages
  • Whether the shares will be cancelled or held as treasury shares
  • The source of funds for the buyback and solvency confirmation

For listed companies, additional SGX Mainboard or Catalist disclosure requirements apply. Listed issuers should consult their compliance advisers before proceeding.

Solvency Requirements and Funding

The solvency framework for share buybacks has not changed materially under CALA 2025. The company must be able to pay its debts as they fall due in the ordinary course of business immediately after the buyback. Directors must satisfy themselves of solvency before approving the transaction, and the company secretary should ensure a solvency confirmation is documented in the board resolutions.

Permissible funding sources for share buybacks remain:

  • Distributable profits (retained earnings)
  • Share capital (subject to conditions)

Borrowing to fund a share buyback may be permissible in certain circumstances but requires careful legal review.

What Company Secretaries Must Do: A Practical Checklist

If your company is proposing a selective share buyback after 6 May 2026, the company secretary’s checklist should include the following:

Before the General Meeting

  • Confirm that the company’s constitution authorises share buybacks (or that the requisite resolution to amend the constitution is tabled simultaneously)
  • Identify all selling shareholders and map out their associates to determine who is disqualified from voting on each resolution
  • Prepare two separate resolutions — one for all shareholders (Tier 1 special resolution) and one for eligible minority shareholders (Tier 2 ordinary resolution)
  • Draft the notice of EGM and explanatory circular with full disclosure as outlined above
  • Obtain board approval of the buyback terms and the meeting notice
  • Issue the notice with the statutory minimum notice period (14 days for a special resolution, or 21 days if required by the constitution)

At the General Meeting

  • Segregate the voting registers — ensure selling shareholders and associates are excluded from Tier 1 voting, and that only eligible minority shareholders vote on Tier 2
  • Record the poll results for each resolution separately in the minutes
  • Confirm both resolutions have passed before declaring the buyback approved

After the General Meeting

  • Execute the share buyback agreement and arrange payment to the selling shareholders
  • Lodge the relevant ACRA return within the prescribed timeframe (Form 76A for share buybacks)
  • Update the register of members to reflect the cancellation or transfer to treasury share account
  • Update the company’s share capital account in the financial records
  • Retain all documentation — resolutions, voting records, circulars, and the buyback agreement — for at least five years

Treasury Shares Versus Cancellation

Following a selective buyback, the company must decide whether to hold the repurchased shares as treasury shares or to cancel them.

Treasury shares may be reissued later (for example, under an employee share scheme) or transferred for the purposes of an employee share plan. However, treasury shares carry no voting rights and receive no dividends while held by the company.

If the shares are cancelled, the company’s paid-up capital is reduced accordingly. The company secretary must ensure the appropriate entries are made in the company’s books and that the ACRA return is filed promptly.

Interaction With Other CALA 2025 Changes

CALA 2025 introduced a raft of other changes affecting share capital and corporate governance. Company secretaries handling a selective buyback should also be aware of the following:

  • Named audit partner requirements: If the company is a public company or large private company, the new named audit partner disclosure rules (also under CALA 2025) will apply to the financial statements that form the backdrop to the buyback valuation. See our article on Named Audit Partner in Audit Reports for more detail.
  • AGM and filing deadlines: If the buyback occurs close to the financial year-end, ensure that AGM requirements and annual return deadlines are not inadvertently missed.
  • CALA 2025 broader reforms: For a full overview of all CALA 2025 changes, refer to our comprehensive guide: CALA 2025 Has Commenced: What Every Singapore Director Must Do Now.

Frequently Asked Questions

Does the double-tier approval apply to all private companies?

Yes. The new double-tier approval requirement applies to all companies incorporated in Singapore that wish to conduct a selective share buyback, regardless of whether they are private or public companies. Listed companies must additionally comply with SGX requirements.

What if the company has only one class of shares?

The new requirements still apply. Even in a single-class share structure, the Tier 2 resolution must be passed by shareholders who are not selling their shares in the buyback (and are not associates of the sellers).

Can the two resolutions be combined into one?

No. The law requires two separate resolutions with separate voting pools. Combining them into a single resolution would not satisfy the statutory requirements and could invalidate the buyback.

What happens if only one resolution passes?

If either resolution fails, the selective buyback cannot proceed on the proposed terms. The company may renegotiate the terms and seek fresh shareholder approval, or it may consider an equal access buyback instead.

Conclusion

The CALA 2025 double-tier approval mechanism for selective share buybacks reflects a broader trend in Singapore corporate law towards stronger minority shareholder protection. While the additional layer of approval adds procedural complexity, it also provides greater confidence that selective buybacks are being conducted fairly and transparently.

For company secretaries, the key takeaway is clear: selective share buybacks now require careful advance planning, precise identification of eligible voters for each resolution, and meticulous documentation at every stage. Getting these steps right is not merely good practice — it is a legal requirement.

If your company is considering a selective share buyback, speak with your corporate secretary or legal adviser well in advance of the intended transaction date. For support with your company’s compliance obligations in Singapore, contact the team at Singapore Secretary Services.