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Does Paid-up Capital Gets Locked in the Company Account? How Soon Can You Start Using It?
Does Paid-up Capital Gets Locked in the Company Account? How Soon Can You Start Using It?
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Does paid up capital gets locked in the company Account? How soon you can start using it?
To fully commence one’s business operations in Singapore, a company must incorporate with ACRA first. Company owners can choose from a wide variety of business entities to incorporate their companies with. In the case of a subsidiary or private limited company, paid-up capital will be mandated.
Now, the questions related to paid-up capital are:
We will be answering all of these questions in this article. Continue reading.
What Does Paid-up Capital Exactly Mean?
Paid-up capital represents the funds that shareholders have provided to a Singapore company upon company incorporation.
Picture This
Suppose that you want to incorporate a company. Hence, you have committed $50,000 to explore your business idea. In this case, you have provided money as initial funding to set up the expenses of your business idea and carry out all its required activities. You may even hire some personnel to manage your business.
The fund that you have shelled out is normally provided at the time of company incorporation. However, if the company is found to have subsequently promised, then share capital can also be increased.
Once the company has been set up, the shareholder will typically deposit the said amount into the company bank account. Thus, this amount will be available to the company for business operations expenses.
Does Paid-up Capital Have a Lock-up Period?
Paid-up capital has no lock-in period. It can be used immediately for company requirements and operations.
What Expenses Can Paid-up Capital Be Used For?
Paid-up capital can be used for any company activities, such as:
Paid-up capital cannot be used for the personal expenses of the company directors or shareholders. It must be used for legitimate business expenses only.
How Soon Can You Start Using Paid-up Capital?
There is no time limit in using paid-up capital. It can be used right away to explore business opportunities or ideas more eagerly.
To Conclude
Basically, the sequence of activities is as follows :To reiterate, paid-up capital represents the funding that a company has received from its shareholders, with the aim of spending it immediately for business purposes only.
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