Share buybacks are a well-established corporate tool in Singapore, allowing companies to return surplus capital to shareholders, manage share capital, and create treasury shares for future employee incentive plans. But not all share buybacks are the same — and the Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025), which commenced on 6 May 2026, has significantly tightened the rules for one specific type: the selective share buyback.

This guide explains what a selective share buyback is, how the rules have changed, what directors and shareholders must do to comply, and how the new requirements interact with the broader share buyback framework under the Companies Act (Cap. 50).

Types of Share Buybacks in Singapore

Under the Companies Act, there are two main methods by which a Singapore company can buy back its own shares:

1. Market Purchase (Open Market Buyback)

A market purchase is a buyback conducted through the securities exchange on which the company’s shares are listed. It is open and transparent — the company buys shares from any willing seller at the prevailing market price. This method is primarily relevant for publicly listed companies.

2. Selective Off-Market Purchase (Selective Share Buyback)

A selective off-market purchase is a buyback from specific, named shareholders rather than from the market generally. This is the method most commonly used by private companies (Pte Ltd) where there is no listed market for the shares. Selective buybacks are also used by listed companies in specific circumstances — for example, to buy back shares from a departing founding shareholder or to redeem shares held by a departing employee.

Because a selective buyback allows the company to deal with identified shareholders on potentially bespoke terms, it carries a higher risk of being used in ways that favour some shareholders at the expense of others. This is precisely why the CALA 2025 amendments focused their attention here.

The Old Rules vs the New Rules: What Changed on 6 May 2026

Before CALA 2025

Under the previous framework, a selective off-market share buyback required a special resolution — passed by at least 75% of the votes cast by members entitled to vote. Crucially, all shareholders could vote on this resolution, including those whose shares were being bought back. This created a potential conflict of interest: the exiting shareholder could vote in favour of a buyback that they had an obvious financial interest in, potentially influencing the outcome.

After CALA 2025 (Effective 6 May 2026)

The CALA 2025 amendments introduce an additional layer of protection. A selective off-market purchase now requires:

  1. A special resolution of the company (≥75% of votes cast), as before; AND
  2. A separate approval by at least 75% of the votes cast by shareholders of the same class whose shares are being bought back — excluding the shareholders whose shares are the subject of the buyback from voting on this second resolution.

In other words, the shareholders from whom the company proposes to buy back shares cannot vote on the second resolution approving the buyback of shares in their class. This removes the conflict of interest that the old framework allowed and ensures that the buyback terms are genuinely approved by independent shareholders who are not benefiting from the transaction.

Why This Change Matters

The new dual-approval requirement has several practical implications:

  • Minority protection — a majority shareholder can no longer structure a selective buyback of minority shares without the consent of at least 75% of the remaining shareholders of the same class. This makes it significantly harder to use a selective buyback as a tool to squeeze out a minority at a price they have not independently approved.
  • Founders and early investors — in a typical early-stage Singapore company, a selective buyback of founder or early investor shares now requires the informed and genuine consent of the other shareholders. Founding shareholders who are also majority shareholders and wish to exit via a buyback need to ensure the remaining shareholders independently approve the transaction on its terms.
  • M&A structuring — where an acquisition is structured partly via a selective buyback of target shareholders’ shares, the acquirer and the target company’s board must ensure the new dual-approval process is followed. See also our guide on board resolutions in Singapore for the mechanics of convening the required shareholder meetings.

Constitutional Authority for Share Buybacks

Before a Singapore company can conduct any share buyback — market or selective — it must have the necessary authority under its constitution. Most standard constitutions for Singapore private companies include a provision authorising the directors to proceed with a share buyback up to a maximum of 10% of the issued shares in each financial year, subject to shareholder approval in general meeting.

If your company’s constitution does not include a share buyback authority provision, a special resolution to amend the constitution will be required before the buyback can proceed. This adds a step that should be planned in advance.

The company must also satisfy the solvency requirement — the directors must form the opinion that the company will remain solvent (able to pay its debts as they fall due) immediately after the buyback, and for a period of 12 months thereafter. A directors’ solvency statement should be passed at board level and retained on the statutory records.

Practical Steps for a Selective Share Buyback After 6 May 2026

  1. Check the constitution — confirm that the constitution authorises selective buybacks and that the buyback does not exceed any constitutional limits on the volume of shares that can be repurchased.
  2. Board resolution — the board resolves to proceed with the selective buyback, confirms the solvency assessment, and authorises the convening of the general meeting(s).
  3. Prepare the circular — shareholders of the company and of the affected class must receive a circular disclosing the terms of the buyback, the identity of the sellers, the proposed price, and the reasons for the selective buyback.
  4. General meeting — first resolution — pass a special resolution of the company (excluding the affected shareholders? No — the CALA 2025 change is to the class resolution, not necessarily the company-wide special resolution; check the Companies Act wording for whether affected shareholders are also excluded from the company-wide resolution). The special resolution must be passed by ≥75% of all shareholders entitled to vote.
  5. Class meeting or separate resolution — second approval — pass a separate resolution by ≥75% of shareholders of the same class as the sellers, excluding the selling shareholders. This can be passed at the same general meeting or at a separate class meeting.
  6. Execute the buyback agreement — once both approvals are obtained, the company executes the share buyback agreement with the selling shareholders and processes the transfer.
  7. File with ACRA — lodge the required notification of the buyback through BizFile+ within 30 days of completion. The shares bought back must be either cancelled or held as treasury shares.

For guidance on how treasury shares work following a selective buyback, see our guide to treasury shares in Singapore. For the compliance calendar for all ACRA filings, see our Singapore company compliance calendar 2026.

What About Listed Companies?

Listed companies conducting selective buybacks must comply with both the Companies Act requirements (including the new CALA 2025 dual-approval requirement) and the listing rules of the Singapore Exchange (SGX). SGX listing rules may impose additional disclosure and timing requirements. Listed companies should engage their legal counsel and the company secretary to ensure full compliance with both regulatory frameworks.

If you need [legal advice on structuring a selective share buyback](https://www.justfollowlaw.com) — whether for a private or listed company — specialist corporate counsel can guide the process.

For the latest Singapore corporate law and business updates, directors and company secretaries will find useful commentary on regulatory changes.

Beyond corporate matters, sound investment decisions and financial planning are equally important for business owners managing exits and capital allocation.

Conclusion

The CALA 2025 amendments to the selective share buyback rules represent a meaningful tightening of Singapore’s corporate governance framework. By requiring independent class approval — with affected shareholders excluded from voting — the new rules reduce the risk that selective buybacks are used to disadvantage minorities.

For directors and shareholders planning any share buyback, the message is clear: review your constitutional authority, obtain the correct dual-approval where required, document the solvency assessment, and file with ACRA on time. The cost of getting it wrong — both in terms of the invalidity of the buyback and the personal liability risks under the higher CALA 2025 penalty regime — is now significantly higher than before.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

— The Editorial Team, Raffles Corporate Services