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Edited by Ritu13 at 22-12-2023 01:33 PM
In theory, the issuance of coins is often associated with a decentralized approach, exemplified by BTC, which lacks a centralized corporate structure. However, in practical terms, most cryptocurrency projects usually involve legal entities with established corporate status due to the multifaceted legal and business considerations associated with token issuance and management. In other words, the dream of decentralization in the real world often requires adherence to centralized rules.
In the blockchain community, there is a popular belief that "registering a foundation in Singapore allows for coin issuance." Is this assertion credible? Let's explore this topic with insights from lawyer Mancun Jinjian Zhi.
### 01. What Company Forms in Singapore Can Issue Coins?
Singapore does not prohibit Initial Coin Offerings (ICOs), and they are entirely legal in the country. The Monetary Authority of Singapore (MAS) has even issued a "Guide to Digital Token Offerings" to guide entrepreneurs and investors on the official regulatory approach.
Currently, there is no specific company form mandated by the government for issuing coins. In other words, all types of companies in Singapore can legally issue coins. However, depending on the characteristics of different company forms, there may be preferences in practical choices. Common choices include Private Limited Companies, Public Companies Limited by Shares, or Public Companies Limited by Guarantee, each with its own features as a limited liability company.
### 02. Why Do Intermediaries Advocate for Foundations?
Firstly, it's essential to clarify that when intermediaries mention "foundation," it does not strictly adhere to the legal definition of a foundation in Singapore. Singapore law does not recognize a separate legal entity called a "foundation." Non-profit organizations (NPOs) in Singapore, such as charities or voluntary welfare organizations, can be considered similar to what is referred to as a "foundation." When people talk about a "Singapore foundation," they usually mean establishing a Public Company Limited by Guarantee.
Why is a Public Company Limited by Guarantee favored? According to lawyer Mancun's practical experience, here are a few reasons:
1. **Metaphysical Perspective - Aligning with Decentralization Ideals:** Public companies limited by guarantee, fundamentally, engage in non-profit activities according to the Singapore Companies Act. Therefore, this corporate form prohibits the distribution of profits among members, ensuring that profits are solely used for the company's non-profit activities.
2. **Practical Perspective - Lighter Responsibilities for Project Teams, Easier Coin Issuance:** Due to the characteristics of public companies limited by guarantee, the guarantee amount per member can be as low as SGD 1, and there are no requirements for registered capital. Members also benefit from limited liability protection. The issuance of coins by such companies makes it easier for Singapore lawyers to issue legal opinions on non-securities tokens, helping projects avoid MAS regulation and further facilitating token listing on exchanges. Many well-known Web3 projects, such as Litecoin, Bytom, and Qtum, have successfully issued coins through public companies limited by guarantee.
### 03. Requirements and Process for Registering a Foundation
The requirements for registering a "foundation" (in the sense used by intermediaries) in Singapore are as follows:
- Must have at least one natural person member.
- The committee must have at least three members, with at least two being Singapore citizens or permanent residents or foreign residents living in Singapore.
- A registered address in Singapore, which can be a residential or business address but not a postal mailbox.
- A clear company purpose, explaining the charitable goals for which the company is established.
- A clear company constitution detailing how the company operates and manages, as well as the guarantee amount for each member.
The registration process involves the following steps:
1. **Check Name Availability:** Reserve the desired company name through the Accounting and Corporate Regulatory Authority (ACRA) website using BizFile+. The reservation is valid for 60 days and costs SGD 15.
2. **Prepare Documents:** Use the reserved name and attach the prepared company constitution and other related documents, such as a member list, member guarantee amount, director list, secretary list, etc., to apply for registration.
3. **Submit Application:** Submit the registration application through ACRA's online system, paying SGD 300. In most cases, if there are no issues, the application will be approved within 15 minutes, with an email notification.
4. **Collect Certificate:** Within 14 days of receiving the email notification, collect the company registration certificate (BizFile+) at the location specified by ACRA. This serves as formal proof of the company's establishment.
5. **Tax Registration:** Register with the Inland Revenue Authority of Singapore (IRAS) within six months of establishing the company and apply for a tax number. If opening a bank account or applying for other licenses or permits, these should also be completed during this stage.
### 04. Summary by Lawyer Mancun
As a blockchain-friendly and innovation-driven country, Singapore provides a legal, flexible, and efficient platform for cryptocurrency projects to issue coins. By establishing a public company limited by guarantee (foundation), project teams can more easily issue non-securities tokens and enjoy the advantages of limited liability and non-profit nature. However, |
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Post time 25-11-2023 09:56:32