In accordance with Singapore legislation, every incorporated company must have at least one shareholder. A shareholder is an individual or legal entity that holds an ownership stake in the company. It is not mandatory for a shareholder to be a natural person; it can also be a legal entity.

The fundamental requirement is that the shareholder, whether an entity or person, has made a monetary investment (or share capital) in the company, entitling them to a certain percentage of company shares.

Although the Companies Act of Singapore does not explicitly specify the minimum age for a shareholder, minors are generally considered to lack the legal capacity to enter into binding contracts. The age of majority in Singapore is 18 years of age (Section 35(1) of the Civil Law Act (“CLA”) Consequently, any contracts entered into by minors before reaching the age of 18 are not legally enforceable.

This could potentially pose future challenges for your business. For example, if shareholders’ endorsements are required, this could pose an issue if the shareholder who has not attained the age of 18 enters into the agreement. The question is whether the actions of that shareholder are binding. However, an alternative option is for a minor to have shares held in their name by their legal guardian, who acts as the beneficial owner. This is a trust arrangement. Once the minor reaches 18 years of age, the shares can be transferred back to them.

If you decide to pursue this approach, you should seek legal advice when drafting the relevant agreements.