#DragonTips (updated weekly!)
Last updated: 2020-11-03 (originally published on 2016-08-11) — by Zegal
Every Monday, we share a quick tip on our social media platforms, including our Facebook and Twitter pages. Ranging from advice on the type of legal documents you’ll need for running your own business to updates about the latest changes in the relevant laws and regulations, we’ll help you stay on top of things. Don’t worry if you missed it, because we’ve got it all covered for you in this post that will be updated weekly!
What constitutes personal data under the PDPA
The following constitutes personal data under the PDPA:
- Full name
- NRIC or FIN number
- Passport number
- Photograph or video image of an individual
- Mobile telephone number
- Personal email address
- DNA profile
- Name and residential address
- Name and residential telephone number
Ensure your company does not breach any PDPA regulations:
Obtaining funding from private investors
A popular way to obtain funding for many startups is through private investors. Common ways an Angel Investor or Venture Capitalist may invest in your company include:-
- Ordinary Shares
- Preferred Shares
- Convertible Note
- Simple Agreement for Future Equity (SAFE)
Download our free eBook on to learn about the pros and cons of each mode of financing:
Registration of transfer of shares should be accompanied by a Share Certificate
It is a legal requirement in many jurisdictions, including Hong Kong and Singapore, to provide shareholders with a Share Certificates as evidence of their shareholding. No transfer of shares should be registered unless accompanied by the Share Certificate. This provision protects both the shareholders and the company.
Create a Share Certificate online today using our web app:
Ensure key documents are in place when starting & running your business
Business owners might not always be aware, but the following are essential legal documents for starting up and running a business:
- Intellectual Property Assignment Agreement: A contract for an individual or company to transfer the ownership of its trade marks, copyright and any other IP rights to another business or individual
- Non-Disclosure Agreement (NDA): Also known as a Confidentiality Agreement or Secrecy Agreement, the NDA is a legal contract that creates a confidential relationship between the parties to protect any type of confidential business information
- Term Sheet: A term sheet is a preliminary document that will include the key terms of an investment in a company, including the agreed-upon valuation of the business, the proposed capitalisation table, the key financial and legal terms, and the rights of the company and the investors.
Create more than 100 legally binding contracts using our web app:
How to find out if a VC is right for you
A popular way to obtain funding for many startups is through private investors. Here are some questions you could ask to find out whether the VC is a good fit:-
- Does the VC have a track record of investing in similar businesses?
- What expertise do they bring to the table?
- Can they bring you access to a wider investor network?
- What is their exit strategy?
- What level of day-to-day involvement or board representation do they wish to have?
Learn more about fundraising for your start-up:
Key changes to the Employment Act from 1 April 2016
On 1 April 2016, the amendments to the Employment Act of Singapore came into effect. To ensure that their businesses comply with the Employment Act, employers will be required to:
- Issue key employment terms (KETs) in writing to employees covered under the Employment Act
- Issue itemised payslips to employers covered under the Employment Act
- Maintain detailed employment records of employees covered under the Employment Act
Source: Ministry of Manpower Singapore (read more)
Do away with an AGM by passing a resolution (only in Hong Kong)!
In Hong Kong, a company is required to hold the first Annual General Meeting (AGM) within 18 months from the date of incorporation. Subsequent meetings must be held every calendar year with an interval of no longer than 15 months. Alternatively, a company may pass a resolution to remove the need for an AGM. Resolutions that are typically voted on at an AGM may be passed in written form.
Find out how to do with less AGMs in your Hong Kong company:
Remember to hold regular AGMs for your company in Singapore
In Singapore, a company is required to hold the first AGM within 18 months from the date of incorporation. Subsequent meetings must be held every calendar year with an interval of no longer than 15 months. For a private limited company, this must be within 6 months of a company’s financial year-end. For a publicly listed company, this must be within 4 months of a company’s financial year-end.
Find out when you will need to hold an AGM for your company in Singapore:
Attract talent using an Option to Purchase Shares
A start-up is only as good as the talent it attracts. One way to incentivise your employees is to use share options. An Option to Purchase Shares offers employees the option to purchase shares from the company at a pre-determined price. It operates as a type of security that gives the holder the option, but not the obligation, to buy the shares at a particular price.
Create an Option to Purchase Shares using our web app:
Use a Letter of Intent when negotiating with a supplier
A negotiation may reach a stage where parties are not ready to sign a contract, but they want to have a summary of what has been discussed regarding what the future contract will be like. A Letter of Intent can be useful in this situation.
A Letter of Intent:
- Summarises what was discussed in a meeting;
- Mentions how further negotiations shall be conducted; and
- Sets a deadline for a final agreement to be reached
Use a Letter of Intent when:
- In early stage negotiations with a supplier;
- When preparing for a joint venture; or
- In general scenarios when both sides are bringing something to the table
Create a Letter of Intent using our web app:
Get rewarded for productivity with Singapore’s PIC scheme
The Productivity and Innovation Credit Scheme was introduced to encourage productivity and innovation activities in Singapore by providing support to businesses that make investments to improve their productivity.
What criteria must by business fulfil in order to be eligible for the cash payout option under the PIC scheme in Singapore?
- Have an active business operation in Singapore
- Incur qualifying expenditure and be entitled to PIC during the basis period of qualifying Year of Assessment
- Meets the three-local-employee condition
- Minimum qualifying expenditure for each cash payout option application is $400
Set out a Consultancy Agreement when freelancing in Hong Kong
Also known as a Freelance Agreement or Freelance Contract, a Consultancy Agreement sets out the relationship between your business and an independent consultant or advisor and clarifies what you expect from the consultant. If you are a freelancer looking for work in Hong Kong, be sure you establish a Consultancy Agreement that includes:
- A confidentiality and intellectual property clause
- Details on how to end the relationship
Create a Consultancy Agreement using our web app:
For foreigners looking to set up a company in Singapore
A foreigner who wants to set up his own company in Singapore is required to appoint a Resident Director locally. The foreigner can continue to reside outside of Singapore during the set-up. If the foreigner would like to be present in a Singapore during incorporation, he is strongly advised to seek approval from the Ministry of Manpower (MOM) before registration.
Advantages of registering a trademark in Hong Kong
Although not compulsory, there are some advantages to registering a trademark for your business in Hong Kong:
- Deterrent against unauthorised use;
- Assists in blocking competitors from similar registration;
- Simplifies procedural requirements for enforcement;
- Eases the seizure of infringing goods; and
- Helps with licensing
Appoint a secretary for your company
According to Section 171 of the Singapore Companies Act, a company is required to appoint a company secretary. Private limited companies need not appoint a professionally qualified secretary. However, a secretary must still be appointed. Public companies must appoint a professionally qualified secretary.
Source: ACRA Singapore (read more)
Apply for the correct visa and work permit depending on whether your latest hire is an independent contractor or employee
Depending on whether your latest hire is an independent or employee, he or she may have certain entitlements, such as medical insurance, annual leave, and housing allowance.
Here are the key differences between a contractor and an employee:
|Has a client-contractor type of relationship||Has an employer-employee relationship|
|Contractor carries out business on their own account||Employee does business for the employer|
|Not covered by the Employment Act||May be covered under the Employment Act|
|Statutory benefits do not apply||Includes terms of employment such as working hours, leave benefits, etc|
Source: Ministry of Manpower Singapore (read more)
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